Rangers administration: Battle for survival enters crucial phase as deadline looms
RANGERS joint administrator David Whitehouse expects there to be at least four bids tabled from interested parties by the deadline of 5pm for “best and final” bids for the Ibrox club.
Blue Knights, headed by former Rangers director Paul Murray, American investors Club 9 Sports and a Singapore-based group are all expected to make formal bids, before a preferred bidder is chosen.
Brian Kennedy, the owner of rugby union side Sale Sharks, is also believed to be considering making another bid. He is, however, keeping his cards close to his chest. A spokesperson for Kennedy on Tuesday denied that the businessman had already re-submitted an offer, having already had one rejected last week for being too low. Another British-based consortium is also believed to be in the running to control Rangers.
The battle for ownership has now reached a critical stage. As, too, has the battle for Rangers’ survival. Duff and Phelps, Rangers’ administrators, hope to be in a position to confirm “an exit strategy” for the club after the Easter weekend.
Rangers were placed in administration by owner Craig Whyte on St Valentine’s Day and have endured difficult weeks since then as Duff and Phelps attempted to stem losses running at £1 million a month.
The players, who have agreed to significant wages cuts, were kept up to date with the latest developments in an meeting at Murray Park. Whitehouse has confirmed that negotiations have started with the Scottish Premier League, the Scottish Football Association and Uefa in anticipation of the formation of a so-called newco Rangers should that course of action be followed by a new owner.
“There is an on-going dialogue,” he said. “We are aware of the framework and the appeals process. From their point of view, they won’t make a clear decision until such time as there is a clear proposal on the table.”
The Ibrox club are reported to have applied to Uefa for a licence to play in European competitions next season despite missing a 31 March deadline.
Of more immediate concern is tonight’s deadline. Whitehouse stressed on Tuesday afternoon that a Company Voluntary Arrangement [CVA] is the “process of choice” since it avoids further football-related sanctions. This, Whitehouse noted, “is in the gift” of the bidders.
“The primary objective of administration is to achieve the survival of the business,” said Whitehouse. “The manner of which this business would survive in its existing entity would be via compromise with creditors and then exit through a CVA. But for a CVA to be deliverable it also has to be acceptable to the creditors – so therefore it is in the gift of the bidders to deliver a CVA. If they bid at levels which are below other bids and below a value which is commercially acceptable then you have to accept that there are a number of creditors who will vote on economic grounds. We have an obligation to seek to achieve the hierarchical purpose but we can only do that with a sensible bid.”
Whitehouse is confident that Craig White will not be an impediment to any prospective deal. The Rangers owner is known to have a difficult relationship with Paul Murray, the driving force behind the Blue Knights consortium. Although he has made it clear he would find it difficult to transfer his shares to Murray, this transaction could still be completed with someone else from the consortium. According to Whitehouse, “we [the administrators] have a difficult relationship with Craig Whyte, because there is a lot of litigation going on. But he has always maintained that he does not wish to stand in the way of a restructuring of the business.”
“What we want to ensure is that a CVA can be delivered – the easiest way of that happening is for Craig Whyte to cooperate with the process of transferring shares,” he added.
Whitehouse noted that a comment made by Paul Clark, his fellow joint administrator, that Whyte would be “completely irrelevant” to the administration process had been taken out of context. “The point Paul Clark made is that if he [Whyte] didn’t provide that co-operation there are other ways we can go about it.
“But he has not at any point said to us that he is prepared to stand in the way of a transaction. Where it does get difficult is when certain potential purchasers are openly hostile to him in the media and then want his co-operation to transfer his shares. That makes for a tricky negotiation.”
Whitehouse also revealed that he has been in touch with HMRC following reports that a verdict in the “big tax case” is imminent.
The case has cast a large black cloud over attempts to conclude a deal with a new owner. When the verdict is expected is another imponderable at present.
“I asked them [HMRC] that question on Tuesday,” he said. “There was a rumour it was likely to be soon. Hopefully there will be more feedback on that tomorrow.”
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