Rangers takeover: ‘Dangerous’ Blue Knights strategy risks liquidation, says David Whitehouse
RANGERS’ administrators Duff & Phelps have accused Brian Kennedy and the Blue Knights of pursuing a strategy that could “bring about the true liquidation of the club”.
On another day when the administrators and the Knights took verbal pot-shots at each other, co-administrator David Whitehouse said that Kennedy and the Knights were being disingenuous to fans but Kennedy later claimed that it is the administrators who are being disingenuous.
Whitehouse also stated that Kennedy and the Knights remained a sideshow in the bidding process, ranking fourth out of four bids.
Last night, the word was that Charles Green, backed by a venture capital fund, was inching closer to finalising a purchase of the club and that it could be concluded today.
“Brian Kennedy is adamant he’ll come back in,” said Whitehouse. “He’s sure that his tactics will remove everybody from the frame but my concern is that, if his tactics were to achieve that, they could bring about the true liquidation of the club. It’s very hard to see how HMRC could be persuaded to accept a bid of that ilk when there’s an asset base that includes Ibrox and Murray Park. I think he’s pursuing a very dangerous strategy.”
Whitehouse was responding to the Knights’ Friday press conference when Kennedy and former Ibrox director Paul Murray made serious accusations about the administrators, not least that they put the future of the club in jeopardy by turning away the Knights bid and that they would have “blood on their hands” if the latest favourite, Green, does a Bill Miller and walks away.
The incensed administrators responded by divulging specifics of the failed bid. Their interpretation, it has to be said, is disputed at every turn by the Knights but Whitehouse said the Knights offered £2 million in cash, compared to Green’s £8.5m. The rest is made up of numbers the administrators have no truck with.
“We specifically asked the bidders to exclude certain assets. The principal thing was the football debtors – monies owed from other clubs to Rangers, predominantly the Nikica Jelavic money from his move to Everton. That was made clear from the start and everybody took it on board except Brian Kennedy,” said Whitehouse.
“So, the Blue Knights bid is as follows: £5.5m on day one, but they have included the football debtors [mostly, the money due from Everton]. They have valued the football debtors at £3.5m. The actual number is £3.8m but let’s go with their £3.5m. So, in terms of actual value to creditors, it’s £2m they’re coming up [with]. In addition to that, they are saying they are going to pay Scottish football clubs up to £1m [Hearts are due £800,000 for Lee Wallace], but what actually happens is that, at the end of every season, the SPL deduct from your prize money payments that are due to other clubs. So those clubs are going to get paid no matter what. So that million you don’t count.
“Then they’re saying they’ll pay another £2m in relation to European football. It’s made up as follows: £500,000 for each year from 2012-13 and 2013-14 and the other £1m could come if, in one of those years, we reach the quarter-finals of the Champions League, which is optimistic. Well, we know we’re not going to qualify for Europe next season.
“In aggregate, they say that gets them to £8.5m. They have also said in a subsequent e-mail that they might consider paying European football creditors, the likes of Rapid Vienna [money Rangers owe for Jelavic]. Now, again that would not create any value for our creditors. It might be something they chose to do as a sop to UEFA but there’s no statutory obligation to do it. That’s £2.7m. So that’s how the Blue Knights get to £11m, but in our view it’s only £2m and maybe £2.5m to creditors.”
Last night, Kennedy issued a statement, saying that the administrators were guilty of “disingenuous spin”. The Scot states that the Knights will put £5.5m net into the creditors’ pot and, upon being made preferred bidder, will fund the club to the tune of £3.6m until their CVA is completed in late July. “Therefore, on exiting CVA, the total cash out, paid by the Blue Knight investors, is £5.5m plus £3.6m = £9.1m,” said Kennedy.
“The total amount we believe that’s needed to fund RFC, including the £9.1m by the end of June, is around £20m. Any transfer monies in would reduce this, but we may need to make some player purchases, too.”
Rangers are forbidden from signing players at present. Kennedy claims that the administrators told the Knights that their bid was in the “right ball-park” on 28 May and also claims that last Thursday they were informed that they were likely to be given preferred bidder status. “In fact, on Friday morning, there were exchanges of contracts for interim funding between our lawyers and Duff & Phelps. Clearly our bid was enough then, until a higher bid was received at the 11th hour.”
The is an increasingly bitter spat between the Knights and the administrators. Whitehouse is convinced that the Knights deal, even if it was the final hope, wouldn’t stand a chance of being approved by HMRC in a CVA.
“They [the Knights] have adopted a strategy to try and bulldoze the process and railroad us into submission. Frankly, even if they were able to railroad us, which they won’t, I don’t believe that their offer is one the creditors will accept. And we speak to HMRC on a daily basis. HMRC have made it very clear that they don’t believe in the football creditor rule so it would be contrary to stated policy to accept what the Blue Knights are proposing. Brian Kennedy and is aware of that.
“Their offer is just not enough, and to come out and say you’ve offered £11m is disingenuous to the fans. He has to buy the club with cash, not with media influence.”
Kennedy has said his bid is now off the table, but it’s understood he’s still making calls. There is a general acceptance that the Knights would make fine owners of Rangers but they have to make an acceptable offer first and they are nowhere near that. They talk of having reached the financial “quantum” set out by Duff & Phelps but there is huge disagreement about that. “I genuinely don’t believe we’re going to get there with the Blue Knights,” said Whitehouse. “We have three proposals, one is ready to go but is at a relatively low level [Bill Ng], but it’s still significantly higher than Brian Kennedy’s bid. The secondary bid is not quite there yet but is with very high-profile people whose confidentiality we respect and there’s the Charles Green bid.”
There could be an announcement on that front today. Seeing is believing, however.
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Saturday 25 May 2013
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