Rangers’ Big Day at a glance 48
Well, it’s safe to say it’s all kicked off big-time today, with not one but two massive developments in the Neverending (Rangers) Story. Firstly, you can read the entire CVA document for yourself here. But these are the bullet points:
1. The £8.5m Charles Green and his consortium (“Sevco”) intend to fund their purchase of Rangers with is in fact a loan, to be paid back (with interest) by 2020 [Section 4.20], despite Green’s previous pledge to run the club “debt-free”.
2. According to the BBC, Duff & Phelps’ fees during the period of administration to date are £5.5m, leaving just £3m in the pot for the creditors.
3. Highly unusually, the proposal doesn’t actually specify a percentage creditors will be paid. But Rangers’ current debts are in the region of £55m, meaning the maximum payout to unsecured creditors will be slightly over 5p in the £. The actual figure is impossible to gauge, as the CVA proposal document is full of unknown sums marked “TBC”, such as the amount owed to Craig Whyte. [Schedule 8]
4. Should Rangers lose the Big Tax Case the debt will at least double, but is widely thought likely to increase by even more, taking the total to around £150m. This would reduce the maximum payout to unsecured creditors to 2p in the £.
5. Should the CVA be rejected by creditors, Green has a contractual obligation to purchase the club’s assets for £5.5m (presumably again in the form of a loan, though this isn’t explicitly specified) and liquidate it, saving himself £3m. [Section 4.23] By coincidence the purchase price is exactly the sum quoted by the BBC for Duff & Phelps’ fees, leaving precisely £0 in the pot for creditors.
6. The creditors therefore have a choice between accepting a maximum of 5p in the £ (but likely much less than that), or getting nothing at all.
More coming as we unravel it. All we can say is that in a world where Robert Mugabe is about to be made a UN tourism ambassador and the head of the IMF doesn’t pay any tax, the notion of a bankrupt football club with £50m of unpayable debt and up to £100m more hanging over it BORROWING the money to pay off its creditors – by offering them an unspecified amount somewhere between almost zero and actually zero and expecting them to willingly agree to the deal even when one of them is the nation’s taxman – suddenly doesn’t seem all that insane by comparison.
























