HEARTS’ parent company UBIG has joined the administrator of the club’s largest creditor Ukio Bankas in petitioning for BDO to take over the administration of the club.
Hearts themselves applied on Monday for KPMG to be their administrators and, although they appear resigned to losing the argument, that have been told that a ruling may not be made until Friday. Applications to go into administration have to be heard within five days and last night Tynecastle sources said they had been given no firm indication that a Court of Session hearing would take place today.
Meanwhile, the Foundation of Hearts’ hopes of taking over the stricken club were boosted yesterday by the news that more than 5,000 supporters have now pledged a monthly sum to the campaign – an increase of 25 per cent in a day. Last night the Foundation began the process of converting pledges into cash commitments.
The disagreement between Hearts and the two Lithuanian companies over the appointment of an administrator was yesterday presented in some quarters as a “bitter battle” which could be ruinous to the club. But Hearts’ understanding is that, far from there being anything sinister in the attempt to have BDO installed, Ukio administrator UAB Valnetas believes that Bryan Jackson of BDO is the most experienced practitioner in the field. Hearts also believe they should continue to take on trust the insistence by Valnetas that their interests lie in preserving the club as a going concern.
Gintaras Adomonis of Valnetas spelled out his firm’s thinking yesterday. “We thoroughly analysed [the] financial and legal framework of Hearts’ case and, taking into account failure by Hearts to cover the debt to HMRC, it appeared that administration of the club is the only
option available at the moment,” he said, referring to an overdue bill to HMRC of around £40,000. “We still believe that we should stay with our ultimate goal to defend the interest of the creditors of Ukio Bankas and sell the club to the appropriate investor as soon as possible. Thus, we want the administrator to be not only experienced but dedicated to football as well.”
Ukio Bankas owns 29.9 per cent of the shares in Hearts and has a security over Tynecastle to cover £15million it is owed by the club. UBIG, which has applied to be declared insolvent and whose assets have been frozen by a Lithuanian court, owns 50 per cent of the shares and is owed £10m. Although UBIG still officially remains the club’s parent company through its ownership of Heart of Midlothian plc, its links with Edinburgh have loosened since the March resignation from its board of Sergejus Fedotovas, still a Hearts director, and Vladimir Romanov, who once had a controlling interest in both UBIG and Ukio Bankas. The lack of communication has been highlighted by the fact that either UBIG failed to instruct Hearts who the club should seek to appoint as administrator, or Hearts felt able to ignore such an instruction. Until recently, even some minor decisions within Tynecastle were only given the go-ahead after consultation with group headquarters in Kaunas.
Foundation chairman Ian Murray MP warned Valnetas that there would have to be a compromise over their twin desires to preserving Hearts as a going concern and defending the interests of Ukio’s creditors. “They did say that they wanted Hearts to be a going concern – they have to protect what they have got,” he said. “What do they have at the moment? They have a club in administration and a stadium worth £4m.
“They can whistle in the wind, really. They have to be careful that they don’t walk away with nothing and take the club with them.”
Murray also insisted that, while various other groups were said to be interested in bidding for Hearts, the Foundation was the only one to state its aim in public. “All these people [are] speculating through the media and press that they are potentially going to buy the club, when the only real bid or potential bid on the table is from the Foundation of Hearts. We are the only ones who have said we have the wherewithal to do this, and we are not looking for a bit of quick publicity.
“Administration now means it becomes a free for all,” he continued. “It makes it difficult for people who want to do it properly. It’s like buying something cheap. You only know what you get when you open the tin.
“That might scare some people away but, hopefully, given the proud history of the club and the sheer potential of the club, people will see it as a good business opportunity. If I was a hard-nosed businessman who knew nothing about football, I would see it as a pretty good bet at the moment – it has significant potential, and administration might deliver the club as debt-free, and it has a turnover between £7m and £10m a year, and has a wage bill that is affordable, in Scotland’s capital city.”
While Murray has said that the Foundation would consider working along with other groups willing to invest in Hearts, he is increasingly confident that, given the growing commitment by supporters, his organisation can take over the club and run it professionally.
“It is fantastic that we’re now talking to over 5,000 supporters when the process of converting pledges begins,” he added. “The Hearts supporters have been absolutely incredible, and we know they are going to rise to the challenge of allowing us to make a credible bid for control of Hearts, which will create a supporter-governed, community-focused club run by highly professional people charged with ensuring the oldest club in Edinburgh can have a bright future after these difficult days.”