RANGERS will need a £10 million cash injection to stay afloat in the next 18 months, according to former chairman Malcolm Murray.
The club’s complex ownership structure, as well as the discontent from supporters at the continued presence of finance director Brian Stockbridge on the board, also has Murray concerned about the ability to attract such investment.
The businessman was one of the four “requisitioners” who failed to be voted on to the Ibrox board at Thursday’s annual general meeting, but Murray believes the outcome of that event, which witnessed loud booing of any contribution from Stockbridge, will not be “the line in the sand” hoped for by new club chief executive Graham Wallace, who has also admitted Rangers need “external funds” in the medium term.
Murray said: “Unless they can pull a few rabbits out of hats I don’t see who will invest in the club if the board remains exactly the way it is presently.”
Murray said. “In the next three months there have to be changes. I’m pretty sure they won’t be able to go back to the same institutional investors for more money with the current board set-up. The bulk of them certainly wouldn’t do it. The danger now is that the institutional investors pile out of this, because they are fed up. I’m not saying it will happen, but there is a danger that I’m worried about.
“If that happens, the share price goes down and the cost of raising capital goes up, by definition. This thing needs an injection of roughly £10m over the next 18 months.”
Murray claimed that 40 million 25p shares would be required to raise that sum.
However, issuing such a large number of shares would dilute the existing shareholding of current investors and Murray insisted that would be “terrible” for the financial institutions who have already put money into the club.
He added: “They could equally end up sitting on stock that isn’t highly valued but remains a global brand.
“However, it is a mix-up because it has institutional investors, fans, private investors, and this mysterious block of 40-odd per cent [of shares] that seems to control it [the club] in Laxley, Blue Pitch, Charles Green’s old shares and Mike Ashley.”
South Africa-based businessman Dave King has claimed that he was the only person he felt would be willing to invest in Rangers at present but chief executive Wallace presented a different picture. He said: “We will need investment as we go forward. What I don’t want to say is we need a figure of X million pounds because, until we’ve examined the structure of the organisation, and what we need [over] the next 18 months, it’s premature to put a figure on it. As I went round talking to institutions in the last several weeks, they said they were willing to increase their investment provided the club can demonstrate stability and leadership and the semblance of a solid plan.”
Wallace is not planning talks with King but neither does he rule him out. “I’ve never met Dave King or had any conversations with him,” he added. “When we have developed the plan to determine the level of funding we need, we’ll engage with a wide constituency. I wouldn’t rule anybody out. If that includes Mr King, we’ll deal with that at the time”