Rangers share issue could happen ‘within weeks’

RANGERS are preparing to launch a new issue of shares sooner than chief executive Graham Wallace intended, as they look to address a shortfall in season ticket sales.

The boycott of season ticket renewals has prompted the clubs board to take action now. Picture: Ian Rutherford
The boycott of season ticket renewals has prompted the clubs board to take action now. Picture: Ian Rutherford

Sources close to the Ibrox club have confirmed a rights issue, which they hope will raise in the region of £8 million, could go ahead within the next few weeks.

Wallace initially outlined the possibility of the share issue when he published his 120-day review of Rangers’ business operations in April.

At the time, he expressed his hope it would take place nearer the end of 2014, when circumstances were more favourable.

But the boycott of season ticket renewals, instigated by former Rangers director Dave King and the Union of Fans umbrella group of supporters, has prompted the club’s board to take action now. Rangers have not revealed how many season tickets they have sold so far this summer but they are clearly down significantly on last year’s figure of around 36,000.

Rangers raised £22m from their first public issue of shares in December 2012 following liquidation and the purchase of the club’s business and assets by Yorkshire businessman Charles Green’s consortium. Many of the investors brought on board by former chief executive Green, including current football club board chairman Sandy Easdale and Isle of Man-based hedge fund Laxey Partners, are expected to take up their option to buy new shares.

Only when existing shareholders have had the opportunity to exercise that option will shares be offered to new investors.

Rangers had just £3.5m cash at the back at 31 December 2013, compared to £21.2m the previous year. In March this year, the club took out short-term loans totalling £1.5m from Sandy Easdale and shareholder George Letham which are repayable by 1 September.

Chief executive Wallace has repeatedly stated Rangers are in no danger of going into administration. While in Canada at the annual convention of the North American Rangers Supporters Association at the weekend, he declared the club were “in a good place” financially.

But speaking in April, when he revealed the findings of his review, Wallace made it clear he would prefer not to undertake another shares issue in the short term.

“We have authority to go and do a rights issue which we could push the button on to do now,” said Wallace. “My view is that it is not in the best long-term interests of the club to do that now. What I want is to do a significant equity raise later in the year, when the climate will be better for us.

“We do have options, including a rights issue, that, if we were to find that the business was not being supported to the level of season ticket renewals that we would hope, that if it got to the point where there was an issue, we have options. Am I confident that the business can survive and not go into administration? I repeat what I said before: Yes I am.”

The decision to press ahead with a share issue was taken after lengthy talks earlier this week in London between Sandy Easdale, his brother and plc board member James, representatives from Laxey Partners and other major investors, including Blue Pitch Holdings and Margarita Holdings.

“I would expect the club to press ahead with the share issue within a few weeks,” said a source close to the talks.

“It’s unlikely there will be many shares left over for anyone, even Dave King, to purchase.

“Under stock exchange rules, the existing shareholders get first ‘dibs’ on the new shares.

“Sandy has the full backing of the investors like Laxey, Blue Pitch and Margarita, so it’s fair to assume they will take up their options on the fresh rights issue.”