HEARTS took another significant step towards new ownership yesterday when it was announced that administrators BDO have a verbal agreement with Ubig to buy the Lithuanian company’s 50 per cent stake in the club.
But BDO warned that, while they hope to turn that verbal agreement into a written one in the coming days, there is still no prospect of the club exiting administration this month.
Even if that written agreement is completed between the two parties this week, a court in the Baltic republic would first have to sanction the share purchase. Only then could the Company Voluntary Arrangement involving the Foundation of Hearts be completed. And then, once the CVA had gone through, several more weeks would be needed to tie up all the legalities before administration was at an end and the Foundation were confirmed as new owners.
“The club will not be out of administration by the end of January,” a spokesman for BDO said yesterday. “These processes take time.”
Having said that, BDO, who have been the administrators at Tynecastle since last June, are confident that significant progress has been made with Ubig, who were once Hearts’ parent company under the control of Vladimir Romanov. But, having taken Dunfermline through the same process last year, they are all too aware of the weeks and months that can slip by even after every aspect of a takeover deal has been agreed.
The CVA was voted through at the end of November by the required majority of Hearts’ creditors and shareholders, foremost among them being Ukio, another Lithuanian firm that was also once controlled by Romanov. Ubig abstained, because they are also insolvent.
That CVA was conditional upon Ubig agreeing to sell their stake in Hearts, as their 50 per cent is needed before BDO pass the threshold of 79.9 per cent of the total shares. Last night BDO refused to confirm reports that the verbal agreement announced yesterday was to buy those shares for £50,000.
The Foundation responded cautiously yesterday to news of the verbal agreement, intimating that they would take nothing for granted and were very aware that there was still a long way to go before they had reached their goal. “We are aware of today’s reports,” a brief statement from the Foundation read. “No deal has been done. We encourage everyone to remain focused on the task in hand.”
Similar words of encouragement have been used several times by the Foundation in recent weeks, reflecting their fear that other events at Hearts have unnecessarily distracted attention from the main job of restoring the club to normal ownership.
Last week’s speculation about the club being allowed to get round its current signing ban by operating a one-in, one-out policy is one issue which the Foundation regarded as a distraction, as is the way in which Bryan Jackson of BDO dealt with assistant manager Billy Brown. It was announced last week that Brown, whose short-term contract expires at the end of January, would leave after the St Johnstone game. Then, on Sunday, the day after Hearts had claimed a 3-3 draw at McDiarmid Park, the club’s website announced that Brown would now stay at least until the end of his contract. A day after that, a source close to the club issued further clarification, insisting that Brown would definitely be in the dugout alongside manager Gary Locke for the League Cup semi-final against Inverness Caledonian Thistle on Sunday, 2 February.
Although Hearts will still be in administration when the January transfer window closes, they remain hopeful of being able to replace any player who leaves over the coming ten days. That is very different from being able to replace anyone who has left since the club went into administration. Adam King’s prospective move to Swansea has yet to be finalised. Even if King does go, any new signing to replace him will still need to be approved by the Scottish Professional Football League.
The governing body would almost certainly arrive at a decision more quickly than the Lithuanian legal system, but Hearts will make no presumptions about a favourable outcome.