Hearts administration: UBIG collapse confirmed

Bryan Jackson: 'Improved offers'. Picture: SNS
Bryan Jackson: 'Improved offers'. Picture: SNS
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THE administrator of Hearts claims news that UBIG has been declared insolvent by a Lithuanian court is “positive” for the club’s survival hopes.

Bryan Jackson of administrators BDO claims the move will allow negotiations over securing the Kaunas-based bank’s shares in the club to progress.

UBIG - which owns a 50 per cent share in the Tynecastle outfit and is owed £10 million by the club - had its assets frozen earlier this year but administrators have yet to be appointed.

UBIG has a ten-day period in which to appeal any decision. Should the liquidation be formalised, it means the Hearts administrators can ask to gain access to the shareholding held by UBIG in the Tynecastle club.

However, that process can now get under way following today’s decision - although Jackson claims a final outcome is still some way off yet.

He said: “It’s positive news for the club. At least the appointment of an administrator can now be made.

“Unfortunately, this is just the start of the process. From what I’m told by people in Lithuania, an appeal may be lodged and that can take up to 10 days.

“The initial timescale that I have been given is that it could take a number of weeks before we get a final resolution.

“However, the signs are good because we are finally getting to a point where the ownership of the shares will be resolved and we can start negotiations in the meantime.”

UBIG has been technically insolvent since announcing they could not meet their financial commitments in May.

Joint administrator Jackson has confirmed that both HMFC Ltd and Five Stars Football Ltd had tabled bids on Wednesday evening, after the Foundation of Hearts submitted an improved offer by the 5pm deadline.

Although the bids by HMFC Ltd, fronted by former club sponsor Bob Jamieson, and former Livingston owner Angelo Massone’s Five Stars Football Ltd were received after the deadline, they have been forwarded to Lithuania, and Jackson confirmed that he had held discussions with administrators for Ukio Bankas, the club’s other major creditor, in Lithuania on the subject of the bids.

“I have discussed the three improved offers with our Lithuanian administrators today via a conference call and they are going to consider them further and will give me instruction in how to proceed with them in the next few days,” said Jackson.

Hearts’ administrators BDO were restricted in what they could achieve before UBIG’s insolvency was confirmed by the courts in Lithuania and
liquidators appointed.

This has been described as “the last piece in the puzzle” towards securing a CVA, which is necessary for Hearts to exit administration. However, the process of naming a preferred bidder could take some time.

The administrators are legally bound to consider all the offers received even if there are doubts about the method of funding, with the secured creditors in Lithuania determined to secure the maximum price. The offer made by the Foundation of Hearts is understood to still be slightly shy of the asking price and negotiations are expected to continue in the coming days.

Jackson is set to hold further discussions with the main individuals behind each bid as the administrators seek to gain clear evidence of funding and establish whether they are realistic offers or not. It us understood that this process could take up to a fortnight.

As well as the money owed to UBIG, Hearts are also a further £15 million in debt to another Kaunas-based firm, Ukio Bankas - which, like UBIG, was once controlled by former club owner Vladimir Romanov.

However, the bank - also in the hands of administrators - has a 29.9 per cent shareholding in Hearts and holds a floating charge on Tynecastle as security on its debts.