Confusion over Romanov’s statement on Hearts sale

IN THEORY, Vladimir Romanov’s avowed willingness to sell Heart of Midlothian to its own supporters makes the whole takeover process faster and simpler.

In reality, a considerable number of hurdles has yet to be cleared before a new phase of the club’s history can begin.

Romanov’s brief statement to BBC Scotland yesterday was in one respect simply a public recognition of what has been going on for some time. The Hearts board of directors, who are his appointees, have been speaking to supporters’ groups about selling the club. Moreover, it has been clear for some time that the sum they had in mind was in the low millions – far removed from the initial asking price of £50m which Romanov came up with in late 2011 when he first put Hearts on the market.

Hide Ad
Hide Ad

But in another respect, the Kaunas-based businessman’s declaration only muddied the waters. “We have a plan to sell 51 per cent of the club to the fans,” he said. This came as news to those interested parties who thought they were negotiating for the entire stake owned by Ubig, Hearts’ parent company in which Romanov still has a controlling interest.

Initially, in talks which began last year and went on for some time, Hearts officials and Supporters Direct Scotland (SDS) head Paul Goodwin discussed various models of fan ownership. One model, in operation in Germany among other countries, entailed the purchase of 51 per cent of the shares by fans.

However, talks have moved on significantly since then. With Romanov apparently eager to get shot of Hearts and raise what funds he can, it makes no sense to hold on to 49 per cent. A club spokesperson was unable to clarify the matter yesterday, and it appears that Romanov himself was not asked by the BBC toexplain what he meant, or whether he had forgotten that events had moved on.

Presuming that Ubig’s whole stake is indeed up for sale, it will be up to the various fans’ groups who have been meeting together to agree a united bid. Recent meetings at Tynecastle have seen Foundation of Hearts (FOH), the group which had an offer for the club turned down last year, hold discussions with a number of other organisations in a bid to achieve consensus. Those organisations are: the Heart of Midlothian Shareholders’ Association, the Hearts Supporters’ Trust, the Hearts Youth Development Committee, the Federation of Hearts Supporters’ Clubs, and two campaign groups, Save our Hearts and the 1874 Fighting Fund.

SDS, the umbrella body which backs the Supporters’ Trust movement, has also been represented at meetings, most often by Goodwin. The last meeting was also attended by SDS Council member Richard Atkinson, who has been a St Mirren director since May 2010.

Since having their initial offer rebuffed, FOH have agreed to work with the other organisations in the hope of agreeing a workable takeover model. They have had little choice, given the club’s refusal to deal with them directly and its apparent preference for dealing with SDS.

According to some of those involved in negotiations, if the supporters’ groups can agree on a collective offer for the club, a three-stage plan will be put into operation:

1. The Hearts board agrees a fee with the supporters for the sale of the club.

Hide Ad
Hide Ad

2. The board reaches agreement with the club’s creditors about the debt, which is currently around £20m.

3. The board recommends the sale of the club to Ubig’s shareholders and a vote is taken.

Given nearly a year-and-a-half has passed since Romanov first announced his intention to sell, it is clearly taking some time for stage one to be approached. But the really important step is stage two.

If stage two is successfully completed, that means the people buying the club will take over a company that is debt-free. FOH and the other interested groups are well aware that, with what little money they have, it would be worse than useless for them to buy the club then find they have been saddled with debts they have no way of repaying.

One complicating factor here is that, if anyone at the club knows exactly how much money Hearts owe and to which companies, they are not saying. When Ukio Bankas, the club’s former shirt sponsor, went into administration recently, one of the assets it held was a £6.8m security over Tynecastle. All of Ukio’s assets have been divided into “good” and “bad” debts, with the former now held by another Lithuanian bank and the latter remaining in the hands of Lithuania’s central bank.

Some supporters’ groups are confident that the £6.8m security has been declared part of the bad debt. Normally, holders of such securities can simply demand repayment – otherwise, they have the right to sell their assets, in this case Tynecastle.

But in the current property market it is highly improbable that the Gorgie ground would be worth £6.8m. In other words, Hearts could be worth more to creditors as a going concern – especially if the prospective new owners were able to pay off what was deemed a reasonable percentage of that £6.8m.

“The creditors could demand full payment, but the land is probably not worth that much,” one negotiating party said. “So there is a degree of confidence that a deal can be done with the creditors.

Hide Ad
Hide Ad

“The administrators in Lithuania seem to have been pretty good with the club so far. There is no indication that they’re about to launch a grenade at Ubig if they don’t pay back the security in the next five minutes or anything.”

In that sense, time is on the side of the Hearts support. But until Romanov shows greater clarity, and the board becomes more willing to deal openly with FOH, any substantial progress may well remain elusive.