Hearts administration: financial detail of bids

HEARTS administrators BDO received three offers for the club prior to last night’s 5pm deadline and the Evening News can today reveal the money behind each bid. Foundation of Hearts, HMFC Limited and a group involving the former Livingston owner Angelo Massone all lodged proposals hoping to gain control of the Edinburgh club.

Foundation of Hearts’ offer totals £5.75 million, including £2m to fund a Creditors’ Voluntary Arrangement (CVA). The remaining £3.75m would come from fans. The Foundation calculate that cash pledges from around 5700 fans at an average of £18.50 per month can be used as working capital to run Hearts for the next three years.

HMFC Limited are 
controlled by Edinburgh businessman Bob Jamieson and 
financed by the American-based sports management firm Club 9 Sports. Their bid is understood to be worth £5m – an initial £1.8m for a CVA and £3.2m for working capital for the next three years. 
Massone’s bid, meanwhile, was 
delivered through the Glasgow-based Five Stars Football Limited and is in the region of £4m. It does not include any provision for working capital to meet Hearts’ £2m funding gap this season. It is understood 
the Italian had not been in communication with BDO prior to his bid being submitted yesterday. When contacted by the Evening News, he refused to comment. Foundation of Hearts also declined to comment on their bid after promising to stay silent to allow BDO to identify a preferred bidder.

A CVA would enable Hearts to exit administration if it is accepted by the club’s main creditors Ukio Bankas and Ukio Bankas Investment Group (UBIG), who are owed £15m and £10m respectively. They would need to agree to accept a small portion of that amount for a CVA to go through. Ukio Bankas are themselves in administration but hold a 29.9 per cent shareholding in Hearts as well as control of Tynecastle Stadium. UBIG – who have

applied for insolvency – have 50 per cent of the shares.

Bryan Jackson and Trevor Birch of BDO will now asses all of the above offers before naming a preferred bidder, however that process could take as long as three or four weeks and the administrators have appealed for patience whilst they examine all the interested parties. Once a preferred bidder is named, a CVA can then be drawn up. Jackson said: “We can confirm that we have received three bids for Heart of Midlothian FC.

“Further discussions will now take place with the bidders and also with the legal representatives of the administrators of AB Ukio Bankas. We would then hope to be in a position to name a preferred bidder in due course. At this stage we cannot say how long that process will be.

“As we have said already the delivery of the CVA solution will need the support of the other major creditor and shareholders and there may be a delay in securing that support while administrators are

appointed to those entities. Therefore the sale process may take some time before a deal can be concluded and the club exit administration.

“Under the right guidance, the club has the potential to be successful both on and off the pitch, and it is encouraging to see that a number of prospective owners have clearly recognised this. In the meantime, we will continue to run the club and support the manager in his preparations for the forthcoming season.

“We all want the club to exit administration as quickly as possible but it’s important not to get carried away: we’re still much closer to the start of the process of concluding a sale rather than the end. We ask fans, players and staff for their continued support and

patience.”

Hearts’ season ticket sales continue to increase and have now reached the 10,000 mark. BDO stated upon their appointment as administrators that they wanted to sell 3000 season books to generate urgent funding and that target has now been achieved. A credit card facility has also returned, allowing fans to pay for season

tickets by card.

Birch said: “The Hearts fans continue to respond to the call to support the club and, given the difficult economic times we live in, we have all been overwhelmed and astonished by their passion and generosity in achieving the 3000 season ticket target in such a short period.

“The return of the credit card facility will, hopefully, make payments easier to process in the coming weeks although we would still encourage everyone to come to the stadium to show their support.”

The Hearts managing director David Southern said: “Our supporters have not only given the club an essential lifeline in our battle for survival, they have also demonstrated the strength and breadth of support base that potential new owners of Heart of Midlothian Football Club can count on.

“The Hearts supporters and staff can rightly be very proud of what they have achieved so far through ticket sales and a range of fundraising activities. They can hold their heads high as they and the players are the main reason that the club firstly has retained its SPL status

and secondly has every

opportunity to secure a more stable future.

“If I could shake every one of their hands I would do so but failing that I can assure them that everyone at this club continues to work tirelessly to

deliver the club into safe hands in order that it can be enjoyed by our tens of thousands of supporters for many generations to come.”

On a busy day at Tynecastle yesterday, an offer from Nottingham Forest in the region of £75,000 for midfielder Jason Holt was rejected.

Southern continued: “It’s thanks to the fantastic fundraising efforts of the supporters that we are in a position where we do not have to sell our best talent for below market value. Gary Locke has a small squad and will face a challenging season so to rid him of another player, and such a talented one as Jason Holt, would not benefit him or the club as a whole.”