Hearts: Fans firm up bid as Romanov edges to exit

HEARTS supporters’ groups are “readying their bid” in the wake of bankruptcy proceedings commencing against the club’s main creditor, Ukio Bankas.

MP Ian Murray, who is chair of a working group comprised of several supporters’ bodies, last night held a meeting at which plans to launch a take-over bid were firmed up.

The meeting followed a court hearing in Lithuania yesterday which ruled that bankruptcy proceedings should start against Ukio Bankas, in which Hearts owner Vladimir Romanov had a controlling interest, and appointed Kaunas specialists Valnetas UAB as 
the bank’s bankruptcy administrator.

Football finance experts said that the move was likely to be a positive one for the club, and could lead to a swift resolution of the fans’ takeover bid.

The working group headed up by Mr Murray consists of the Federation of Hearts Supporters’ Clubs, the Foundation of Hearts, Heart of Midlothian Shareholders’ Association, Heart of Midlothian Supporters’ Trust, Hearts Youth Development Committee and Save our Hearts.

Mr Murray said: “The group has hit the button and is now readying its bid. Our message is clear to all Hearts fans: if you want to take over and actually own the club then the time is now.

“This latest news has really galvanised the working group and we are optimistic about taking the reins at the club in the near future. We are focused on encouraging more pledges from fans and turning what pledges we have into hard cash. Things are now moving at a much faster pace.”

He added: “The UKIO Bankas bankruptcy is positive news for Hearts fans and in the coming days and weeks supporters will begin to see quite significant progress.”

Leading football finance expert Neil Patey, believes that Lithuanian administrator Valnetas may now bring about “a swifter resolution” by selling Hearts and Tynecastle as a going concern – to the delight of fans’ groups.

This would first involve the administrator calling in the shareholding of Ukio Bankas’s parent company UBIG, the investment company controlled by Hearts owner Vladimir Romanov. Mr Patey, a partner in accountancy firm Ernst and Young, said: “UBIG, who hold 80 per cent of the shares in the club, pledged to support UKIO Bankas back in January. Therefore, the administrator could claim these assets and sell the shares to a buyer without the club entering administration.

“This scenario would of course be in the best interests of Hearts, the fans and any would-be buyers for the club such as the Foundation of Hearts.”

This view is echoed by Alastair Bruce, of the Foundation of Hearts, who said: “We’ve now begun to get a bit of clarity in regards to the way ahead which is to be welcomed.

“Up until now we have had to deal with Vladimir Romanov through Sergejus Fedotovas.Now we will negotiate with the administrators who come with no emotion attached to the decision process. The fans groups are also now unified and that is really important too.”

However, if the administrator was to follow another route and call in the debt and force administration before May 20, which Hearts believe is the end of the season, the club would be hit with an 18 point deduction and the prospect of relegation.

Entering administration after this would mean the subsequent points penalty beideducted in the 2013/14 season.

Given the substantial losses involved, Mr Patey believes it will take weeks for the administrator to prioritise the break- up of the bank, offering Hearts the chance to make it past the June 1 deadline.

Overall, the Tynecastle club are about £25m in debt, with £15m of that secured against Tynecastle Stadium.

The Lithuanian bank was placed in temporary administration back in January with liabilities close to £400m and all its branches have now closed.

He added: “I don’t think the bankruptcy of UKIO will lead to the imminent administration of Hearts, I believe we are talking weeks rather than days.

“Firstly there is still an appeal process which will last ten days. Secondly, the administrator needs to work out the best value of the bank’s assets, across £100s of millions of assets.

“The biggest thing would be if the administrator decides to call the debt and effectively force administration. For the sake of Hearts I think it’s more realistic to get to the end of the season and claim the final merit payment from the SPL.

“Administration during the season would obviously mean a points deduction and relegation to the first division next year.

“When it comes to selling the asset, an SPL club would be easier to shift than a first division team. So commercially it would make more sense for the administrator to wait until the end of the season.”

Patey has, however, urged caution among Hearts fans as he warned: “In the close season there is no income and cash will be just going out the door, as well as the next instalment of the negotiated HMRC payment to be paid so a quick resolution would be best.”

When asked for a worst case scenario, he added: “We have to remember that the administrator has no loyalty to Scottish football and the Hearts assets are just one batch among hundreds of millions. In Scotland we see Hearts as the be all and end all in relation to the breakup of Ukio Bankas, but I doubt the Lithuania administrator sees it that way.

“He could decide upon a firesale of the assets and sell Tynecastle Stadium to a property developer, if he decides that is the likeliest way to get a decent return.”

Fellow football finance expert, Charles Barnett, a partner in BDO’s football group who has worked with more than a dozen UK football clubs, said of the latest revelations: “I don’t think things are any clearer for Hearts with this information than they were without it. Everybody has known for some time that Mr Romanov is not in control and what this has done has further reaffirmed that.

“Anyone who is interested in buying the club should come forward now and make themselves known to directors.

“But, even with this news, this is not something that is going to be resolved very quickly.”

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FOUNDATION’S E-MAIL OWN GOAL

A FANS’ group hoping to take control of Hearts has been forced to apologise after a blunder led to fears that the details of thousands of supporters had been hacked.

Hundreds of Hearts fans who had pledged to support the Foundation of Hearts, which is vying to take control of the Tynecastle club with the help of donations, received an abrupt e-mail from a Hotmail account that appeared to be demanding cash.

The e-mail contained the phrase “now is the time to pay up”, along with the home address of the fan it was sent to and the amount they had pledged.

It led to fears that the foundation had been hijacked by scammers posing as a group official.

However, an apology was later issued, along with an explanation stating that the e-mail had been sent out in error after a test of the system went wrong, with assurances that fans’ details were secure.

It is understood that Andy Grant, who had been helping the foundation’s working group and accepted responsibility for the error, has offered to resign. Mr Grant received the backing of users of Hearts fan website Jambos Kickback after he apologised.

Labour MP Ian Murray, who has been appointed independent chair of six Hearts supporters groups, including the Foundation of Hearts, said: “The next stage is to convert pledges into proper direct debits, and as I understand it there was testing as to how that system would work, and someone has hit the wrong button. Andy has explained what the problem was and we should accept that and move on.”