Hearts administrators open CVA talks with UBIG

Hearts are awaiting the green light to proceed with a CVA from Ukio and Ubig. Picture: TSPL

However, it is understood that the stricken Tynecastle outfit have still been given no indication how the fallen investment giant will vote at Friday’s creditors meeting.

UBIG, Hearts’ majority shareholder with 49.9 per cent, are currently being run by Vilnius-based UAB Bankroto Administravimo Paslaugos after being formally declared bankrupt last week.

After initially fruitless efforts, BDO now have an effective line of communication with the Lithuanian firm and have answered a number of queries regarding the company voluntary arrangement (CVA) deal being proposed at Friday’s creditors meeting.

The bid, which has been tabled on behalf of fans’ group Foundation of Hearts, is worth £2.5m. However, that fee will be paid solely to Ukio Bankas, as the club’s only secured creditor.

UBIG, on the other hand, are effectively being offered nothing in return for their “yes” vote. But, given their debt is effectively worthless, BDO are hopeful they can be convinced to accept the terms.

As Hearts’ second largest creditor, with £8.2m of their total £28.5m debt, UBIG must either vote in favour of the CVA or abstain for the process to continue. If they vote against the proposal, the takeover bid will collapse. While it is understood that would not mean immediate liquidation for Hearts, a senior source close to the club admitted it would leave the Gorgie institution in a “bleak” situation.

If the CVA is successfully agreed this week, however, then the members/shareholders meeting next Friday is expected to be a formality which will finally result in the club’s shares being handed over.

• Hearts administration: Creditors say CVA possible