Foundation of Hearts ‘ready for bid by end of month’
THE Foundation of Hearts is ready to make “a realistic bid” to buy the Tynecastle club by the end of this month.
Foundation chairman Ian Murray is confident that the current board of directors are willing to talk seriously with his organisation, and that a settlement can be reached which would see Hearts begin next season under fans’ ownership.
“We plan to have our first proposal on the table and submitted to the club by the end of June if possible,” Murray told The Scotsman. “The club has been welcoming and supportive, and we thank them for that.”
The Member of Parliament for Edinburgh South was speaking as it emerged that Hearts are unlikely to meet the payment deadline for an outstanding bill for £100,000 from Her Majesty’s Revenue & Customs. Club sources said yesterday that the deadline for payment is 5pm today – not yesterday as was previously reported – and that it would probably pass without payment being made.
Failure to pay would lead to HMRC issuing a petition for a winding-up order, which would be activated if payment were still outstanding after a further eight days. However, the club insists that it still has every intention of settling the bill before the end of any such period. The likeliest outcome is that payment will be made by the end of this week, and in that case the winding-up order would be withdrawn.
The £100,000 is the outstanding amount from a scheduled payment of £500,000 which Hearts agreed with HMRC. The half-million sum is one of three such payments due to HMRC over the next three years. The total of £1.5m – £1.2m in tax and National Insurance, plus £300,000 in interest – was agreed last December after a dispute about tax and NI due in the case of Kaunas players who were on loan to Hearts.
While the tax case has rumbled on for some time, Murray has made swift progress since becoming chair of the Foundation just five weeks ago. The various groups which now make up the organisation are working together harmoniously for the first time, and, just as importantly, the club has shown a new receptiveness towards the Foundation.
UBIG, the investment group in which Vladimir Romanov has a controlling interest, still owns 50 per cent of the shares in Hearts, and Murray will hold talks with the board about that shareholding. At the same time, there will have to be discussions with the administrator of Ukio Bankas about the 29.9 per cent of the shares which it holds.
Hearts are in debt to both organisations, owing £10million to UBIG and £15m to Ukio. The former loan is unsecured and should therefore be simpler to deal with, but negotiations with Ukio are complicated by the fact that it also holds a security over Tynecastle. Crucially, however, Murray is sure the will is there to bring about a sale.
Romanov first announced he was putting Hearts on the
market towards the end of 2011, but for some time took an unrealistic approach to offers, leading to speculation that he was not really serious about selling out.
Since then, however, the businessman’s fortunes have nosedived. Ukio went into administration earlier this year, and Romanov is understood to be in Russia, beyond the reach of the Lithuanian authorities, who want to interview him about the alleged embezzlement of funds.
Instead of demanding the £50m which was Romanov’s initial asking price, the Hearts board may be eager to reach an agreement which will get the club off UBIG’s hands. The Ukio administrator, meanwhile, is charged with getting the best
deal for the bank’s creditors. The aim for Murray, as it would be for any potential purchaser, is to balance the need to pay a realistic amount for control of the club with the need to keep as much cash as possible to actually run the business once it has been bought.
The Foundation’s principal backing comes from the more than 4,000 individuals who have pledged a monthly sum towards the running of the club, but other than making that number public, Murray said he could not openly state how much his organisation was willing or able to pay to buy control. “People have to understand that in negotiations, the last thing you want to do is show your hand,” he added. “But we are upbeat and confident that we can make a realistic bid. I would encourage all Hearts fans to pledge what they can afford and help us to get Hearts under fan ownership”.
The Foundation will shortly email everyone who has pledged with details of the direct-debit scheme to be used to realise the pledges. Thursday 4 July has been pencilled in as the date when pledges will be activated.
Murray will chair an open meeting for Hearts fans in the Gorgie Suite at Tynecastle this Friday, The meeting is scheduled to start at 7.30pm with addresses from some former Hearts players, then there will be a question-and-answer session.
The MP has been encouraged by the support offered from the four players who scored in last year’s Scottish Cup final victory over Hibernian. Rudi Skacel, Darren Barr, Ryan McGowan and Danny Grainger – all of whom have since left the club – have all given their backing to the Foundation.
“The momentum is growing, and this latest milestone provides a real sense that we’re preparing to enter a crucial phase in terms of converting pledges to cash, and beginning the process of making a formal offer to the board,” Murray said. “I’m absolutely delighted that iconic figures such as the goalscorers from last year’s Scottish Cup Final are backing our ambitions to have Heart of Midlothian Football Club owned by the people who love and cherish it best – the fans.
“I can’t thank them and all the pledgers enough for their support. Myself and the full Foundation of Hearts team are looking forward to meeting several hundred supporters on Friday night when we’ll answer every question put to us.”
Although there has been some speculation that a takeover of the club would be easier to carry out after it went into administration, Murray is convinced that it is far preferable to buy control of an entity that is in as healthy a state as possible. “We would encourage all fans to continue to support the club in the usual way,” he said. “We want to buy the club as a going concern as that gives us the best platform on which to rebuild.”
If Hearts were to go into administration before a takeover by the Foundation, a 15-point penalty would be imposed on them by the Scottish Premier League. New regulations brought into force last summer stipulate that any club which suffers an “insolvency event” will be penalised one-third of its points from the previous campaign. Hearts finished last season in tenth place, with 45 points.