FOUNDATION of Hearts chairman Ian Murray is confident significant progress was made yesterday in talks aimed at completing a deal to take the Tynecastle club out of administration.
A Ubig creditors’ meeting voted to agree to the transfer of its 50 per cent shareholding in Hearts, but an anticipated Ukio creditors’ meeting failed to take place. However, talks between Ukio and club administrators BDO were entered into and Murray believes things continue to progress in the right direction.
“Today has been incredibly positive,” the MP for Edinburgh South said last night. “We’re a step closer to the goal of getting Hearts out of administration, and we’re still within the timescale BDO has set [for a completion] within the financial resources of the club.”
Bryan Jackson of BDO is to remain in Lithuania to continue talks with Ukio over the coming days. The meeting of Ukio creditors now seems set to be held by the end of next week.
It was only when Jackson arrived in Vilnius that he learned the meeting would not be held yesterday. BDO declined to give details about the talks between Jackson and Ukio, which were informal and went on for several hours, but sources in Lithuania are confident that there has been no significant delay to the timetable.
The agreement by Ubig’s creditors means a 20-day cooling-off period has now begun. If there is no challenge to that agreement by the end of that period, sale of Ubig’s 50 per cent shareholding can proceed.
If and when Ukio’s creditors follow suit, the same process will take place. Ukio will receive the lion’s share of the £2.5 million Company Voluntary Arrangement in exchange for its near 30 per cent shareholding in Hearts – the security it holds over Tynecastle. The fact that the Ukio creditors’ meeting did not take place essentially means that the whole issue has gone into extra time with time now very tight.
BDO have said they only have enough money to keep Hearts running on the current basis until roughly the end of this month. An agreement by Ukio creditors on Friday week, 18 April, then the 20-day cooling-off period, would take the saga into the second week of May – at best very close to the limit.
Further, very minor, delays might still be sustainable, but only if a positive outcome were already guaranteed. If Ukio were to continue to procrastinate without such a guarantee, Jackson and his colleagues would have little option but to begin the process of liquidating Hearts.
They believe, however, that such a process would not be in the interests of Ukio and its creditors. Jackson’s job is to convince those bodies that there is no viable alternative to that £2.5m CVA, which Ukio themselves approved in principle back at the end of November.
BDO only granted preferred-bidder status to the Foundation after months of talks with the united supporters’ body and with several other interested parties of varying degrees of credibility. Anyone with a significantly large sum to throw into Hearts had ample time in which to make a credible offer: those who did go so far as to submit an offer were sooner or later dismissed because of uncertainty on the part of BDO about their ability to back up their words with hard cash.
One of those would-be alternatives to the Foundation, theBorders-based businessman Bob Jamieson, again put the case for his own scheme on Sunday night. He insisted he would only step in, however, if Ann Budge, who is funding the Foundation’s bid, were to step down.
Edinburgh businessman Pat Munro also resurfaced on Sunday night, when it emerged he had tabled an alternative bid to the Foundation’s. Munro has failed in several attempts to take over Hearts dating back a decade, and the Foundation remains certain he does not have the money to fund his proposed £15m, 15-year scheme to buy Tynecastle from Ukio.
Despite the lack of credibility of both Jamieson and Munro, there were genuine concerns that their intervention would provoke a further delay in negotiations, thereby increasing the probability that BDO would have to go down the liquidation route. However, neither Ubig nor, it appears, Ukio were sufficiently impressed to want to investigate the Jamieson or Munro “offers” further.
Last night the Foundation summed up the day’s developments on its Twitter account. “Ubig agreement in place for share transfer,” it said. “Twenty-day cooling-off period commences but not anticipating any problems.
“Ukio formal creditors’ meeting did not happen but positive discussions concluded. Formal meeting now expected by end of next week. Major hurdles overcome today with one more to go.”
BDO’s only comment last night was to confirm that the Ubig creditors had approved the transfer of shares.
Foundation of Hearts statement
“We are obviously disappointed that both creditors meetings for UKIO and Ubig did not take place. However, the positive news about the Ubig creditors meeting agreeing the transfer of their 50 per cent shareholding in Hearts is a significant step forward. This should not be underestimated. We understand that lengthy discussions have taken place between Hearts administrators, BDO, and the lawyers administrating Ukio Bankas. The outcome of these discussions were positive and it is hoped that a Ukio creditors meeting will take place before Easter.
“We have taken a huge step towards delivering the Creditors Voluntary Agreement (CVA) today and, to use a football analogy, we would have taken this result before the game. However, we do appreciate how frustrating this is for the supporters and for everyone connected to the Club. We will continue to work closely with BDO and BIDCO to get this deal over the line as quickly as possible and thank all the supporters for their continued patience at this time.
“Tonight Hearts is much closer to being out of administration than it was yesterday. It is a considerable achievement to have got this far. We thank BDO and the teams at UKIO Bankas and Ubig for their sterling efforts and look forward to a positive outcome as soon as possible.”
Ian Murray, chairman
Foundation of Hearts