Rangers FC looks for creditors deal to avoid liquidation
Published: 14th Feb 2012 10:42:53
Rangers FC is set to enter talks with creditors in a bid to save the club from possible liquidation.
Owner Craig Whyte said the club could face disputed tax bills of up to £75m from HM Revenue and Customs (HMRC).
Rangers hope to negotiate a creditors agreement which would see HMRC and other parties accept less than what they believe they are owed.
A source close to the negotiations told BBC Scotland that HMRC seemed likely to adopt a hardline stance in any talks.
Mr Whyte confirmed on Monday that Rangers had filed legal papers at the Court of Session in Edinburgh to appoint administrators.
The club now has 10 days to make a decision on whether to proceed.
The financial storm engulfing Rangers has several fronts.
Mr Whyte has acknowledged that the club has a £10m deficit in annual running costs.
It was reported last week that the chairman had also borrowed up to £24m against four years of future season ticket revenue from Ticketus.
Most serious of all, Rangers awaits a tax tribunal decision over a disputed bill, plus penalties, totalling £49m.
Mr Whyte was reported on Monday as saying this potential liability to HMRC could reach up to £75m if the club lost the tribunal.
In a statement, the chairman said Rangers' immediate future now lay in the hands of HMRC.
"If HMRC were to agree, even at this late stage, a manageable agreement with the club, then a formal insolvency procedure could yet be averted," he said.
"It goes without saying that would be our preferred outcome.
"If not, further investment in the club would be impossible as the threat of winding up by HMRC cannot be removed.
"The Rangers FC Group, the majority shareholder in the club, is prepared to provide further funding for the club on the basis the funding is ring-fenced from the legacy HMRC issue."
Mr Whyte said Rangers had engaged a specialist restructuring practice, Duff and Phelps, to assist in finding a solution to the present position.
On Tuesday, the London-based firm said it would seek to help the club reach an agreement with HMRC.
In a statement, it said: "Duff and Phelps has been engaged by the directors of the Rangers Football Club plc (RFC) to assist its negotiations with HMRC, and possible restructuring options.
Rangers insists it will continue with "business as usual"
"As a result the inability of RFC to conclude negotiations with HMRC, the board of directors have filed a notice of intention to appoint administrators.
"The purpose of this notice is to provide a moratorium against potential creditor actions.
"Meetings are due to take place with HMRC in relation to the tax position of the company.
"Management remain hopeful that with the assistance of HMRC a consensual and solvent solution can be found. In the meantime RFC is continuing to trade as usual."
BBC Scotland understands that Rangers' negotiating team expects HMRC to adopt a hardline stance.
If a creditors agreement - or Company Voluntary Arrangement (CVA) - cannot be agreed, the club's future would hang in the balance.
In such an eventuality, the two legal routes open to Mr Whyte as the main secured creditor would be to pursue receivership or pre-pack administration to satisfy the debts which the club owes.
These would involve transferring Rangers' assets out to another company or companies to satisfy outstanding debts and leaving the club behind with the debt.
If any of these avenues were taken, the 139-year-old club would, almost certainly, be wound up.
A new company could then be formed which would seek to carry on Rangers' name and traditions.
It would, however, have to overcome a number of sporting and legal hurdles to participate in any of Scotland's senior league divisions.
At 23:35:48 in World
At 23:12:26 in Sport
At 22:51:02 in Entertainment
At 22:42:55 in BusinessBarclays agreed to a $280m (£167m) settlement with the US Federal Housing and Finance Authority (FHFA).
At 22:30:17 in England
At 22:22:33 in HeadlinesRussia and the US have accused each other of failing to de-escalate the crisis in Ukraine after Kiev launched raids on pro-Moscow separatists.
At 22:19:49 in SportWorld number one Rafael Nadal booked his place in the quarter-finals of the Barcelona Open with a 6-3 6-3 win over Croatian Ivan Dodig.
At 22:13:15 in SportFormer Rangers, Hearts and Scotland defender Sandy Jardine has died at the age of 65.
At 22:00:20 in Politics
At 22:00:03 in Scotland
Harvard CitationBBC News, 2012. Rangers FC looks for creditors deal to avoid liquidation [Online] (Updated 14th Feb 2012)
Available at: http://www.ukwirednews.com/news/225237/Rangers-FC-looks-for-creditors-deal-to-avoid-liquidation [Accessed 25th Apr 2014]
News In Other Categories
With the doors to its brand new £1million training centre officially open, one of the UK's leading apprentice training providers, Bristol based S&B Automotive Academy, is showcasing its world-class facilities by launching a series of foreign student exchanges for the first time in its 41-year history. To get a flavour of what life is like as an apprentice in the UK, the Academy hosted 16 apprentice engineers and bus drivers from the G9 Automotive College in Hamburg, Germany, as part of a Europe-wide vocational training initiative called the ‘Leonardo Programme’ with support from the European Social Fund. In a reciprocal arrangement, S&B will be sending nine apprentices to Germany during February 2012 so that they can get an appreciation of life in the automotive industry on the Continent. A further three German exchange groups are being planned for next year. Designed to assist the development of vocational skills and training across Europe, including work placements for trainees, the Leonardo Programme has a budget of €1.75bn, which is helping to encourage UK organisations to work with their counterparts abroad. In what is expected to be another challenging year for employers in the UK automotive sector, S&B’s Chief Executive, Jon Winter, claims that the exchange initiative will bring many benefits to the Academy and its apprentices: “In a world of global automotive brands, it’s important for our learners to understand the international context of the industry they have chosen to make their career. This new exchange programme will enable apprentices and Academy staff alike to achieve a better understanding of the challenges and opportunities within the automotive arena in Europe. With the Academy’s influence also extending to the USA and Asia, there’s every possibility that this initiative could move further afield in the future.” Continued Winter: “The need for skilled technicians across the world is on the increase and we actively encourage our apprentices to look at broader horizons during their training. Many of them have already learned the phrase ‘Vorsprung durch Gelehrtheit’, quite simply, ‘Advancement through learning.” In the 2010/11 academic year, S&B doubled the number of successful Apprenticeships over the previous year with some 350 apprentices graduating from the Academy. At the same time, achievement levels reached an all-time high with an overall success rate of 85%. For those learners on the Advanced Apprenticeship three-year programme, success rates were even higher, at over 98%. PHOTO CAPTION: As part of their exchange visit, S&B Automotive Academy arranged for the German apprentices to visit Hampshire bus operator, Bluestar, at its Barton Park depot. The students are pictured with S&B’s Andy West (3rd right) and Steve Prewett, Bluestar’s Area Engineering Manager (2nd right). Ends http://www.sandbaa.com