Craig Whyte reveals Rangers’ debt has been cut in half to £14m

Whyte highlighted the club’s independence from the bank following his payment of a £18m debt to Lloyds Banking Group, but conceded there is a “dark cloud” on the horizon in the shape of the ongoing tax issue with Her Majesty’s Revenue and Customs.

The Motherwell-born businessman has also confirmed that he was once disqualified as a company director. This claim had formed a central strand of the recent BBC Scotland documentary entitled Rangers: The Inside Story.

Rangers have since withdrawn all cooperation with the BBC following the broadcast of the documentary, which explored Whyte’s business dealings before he bought the Scottish champions. Whyte instructed the law firm Carter Ruck to begin legal proceedings against the corporation.

In a statement to the PLUS stock exchange yesterday, Rangers made a “director disclosure” in which it was confirmed that Whyte had indeed been banned, as the BBC claimed.

“Craig Whyte was disqualified to act as a director of Vital UK Limited in 2000 for a period of seven years,” read the statement. “The directors of The Rangers Football Club PLC accept responsibility for this announcement.”

The financial statement, which covers the 12-month period to 31 June 2011, shows that the club’s net debt for the most recent financial year has been reduced from £27m to £14m, while turnover went up by nearly £1m. Rangers made a pre-tax profit of £76,000.

However, this was achieved mostly on the watch of the previous regime. Whyte purchased the club for £1 from Sir David Murray and the long-running negotiations were only concluded on 6 May. Whyte has placed great store in the club no longer being “reliant on bank funding” and outlined this fact in his analysis of the financial results.

However, Rangers are still reliant on Whyte’s own funding. The money owed to Lloyds has simply been transferred to the businessman’s new company, Rangers FC Group Ltd. The fact he remains a creditor for that amount is almost certainly a safeguard in case administration is the dire consequence of losing the tax tribunal.

Gate receipts and hospitality sales increased overall by £1.3m to £27.1m. However, the statement confirms there was an “overall reduction in season ticket sales”.

In his chairman’s statement Whyte recognised the “contribution” Murray, his predecessor, made to Rangers over 20 years. Whyte was more glowing in his praise of Walter Smith’s achievements prior to stepping down as manager in May.

“Three successive league titles, three out of the last four Scottish League Cups, plus two Scottish Cups and a Uefa Cup final appearance is extraordinary by any standard and set the seal on Walter Smith’s outstanding second term as manager and a truly remarkable managerial career.”

Whyte promised changes in the running of the club, which had two representatives of Lloyds Banking Group on the board before he took over.

“Perhaps the biggest change that has been effected since the takeover in May has been the repayment of all bank borrowings,” he said. “The club is no longer reliant on bank funding, nor does any bank control our operations on a daily basis.

“I hope fans would share my view that, looking ahead, the club should do everything to live within its means and operate on a commercially viable basis. I firmly believe that is the only sustainable, long-term strategy for Rangers.”

HIGHLIGHTS • Turnover at £57.2m was an overall increase of £0.9m over the previous year

• Gate receipts and hospitality sales increased overall by £1.3m to £27.1m

• Net operating expenses increased by £3.6m to £47.5m

• Net debt on 30 June 2011 was £14.1m, compared to £27.1m the previous year

• Net current liabilities up to £34.3m from £21.6m

Craig Whyte reveals Rangers’ debt has been cut in half to £14m - but admits directorship ban