'We're not paying that' - Rangers' loans from 'friendly investors' and why Ibrox club tuned down Australian bank

As one of those who pays the piper, John Bennett has unquestionably earned the right to call the financial tune at Rangers.

Rangers vice-chairman John Bennett (right) is pictured leaving the Ibrox club's AGM on Tuesday. (Photo by Ross MacDonald / SNS Group)

The Ibrox club’s vice-chairman is one of the main sources of loans which mitigate the ongoing annual losses the Scottish champions continue to record.

Along with chairman Douglas Park, Bennett has already stumped up the £7.5 million needed to meet this season’s shortfall after Rangers posted a deficit of just over £24 million in their most recent accounts.

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While many of the loans from directors and other Rangers-supporting investors are converted to equity, some are made on repayment terms.

Rangers shareholders gathered at the Clyde Auditorium in Glasgow on Tuesday morning for the club's annual general meeting. (Photo by Ross MacDonald / SNS Group)

Bennett, a senior manager at global asset management firm Janus Henderson, was quizzed on the interest rates on those loans during Rangers’ AGM on Tuesday.

He confirmed that Rangers have turned down recent offers from outside investors, including Australian bank Macquarie who recently agreed a loan with Watford which is secured against the English Premier League club’s Vicarage Road stadium.

But he says the Rangers board will no longer enter into any credit facility which ties them to an interest rate of more than six percent.

"We have had numerous approaches, including in November,” Bennett said. “It is so interesting, they come to you and it could be equity, it could be family offices, it could be banks such as Macquarie Bank and they are active in the football space. They can’t touch our terms.

"What I have been saying, and a number of us have been saying is ‘OK, these are interesting approaches’. I can tell you that one of them was at 13 per cent per annum.

"We’re not paying that. We are no longer paying nine, we are no longer paying eight, six is the new benchmark.

"If those providers can come in and beat that at two levels – a lower coupon, because six is the new benchmark and we have driven the cost of funding down to six.

"I think that is one of the lowest numbers in the whole of football in Britain for loans. But also on security. I can assure you they want a whole lot more security, and a higher coupon.

"You may have seen in the last week that we have issued £3.5million of new equity. That is existing investors converting to equity.

"Some of it secured against Edmiston House. That is a piece of security that has been given before.

"There is no new security on any of the club’s assets being given against the updated numbers. I will give you those updated numbers: £13million has gone in as loans.

"Now, I don’t know about you, but Edmiston House alone, as security for that, Edmiston House is not worth that to any lender.

"I think you would agree with that. You are only able to do that because it is friendly lenders, including myself.

"The other thing about the six per cent, that is the lowest coupon that this company has been paying.

"It was paying nine, you may remember that we had a relationship with Close Brothers and that was nine-and-a-bit.

"We repaid a loan to the former chairman (Dave King) that was eight, it is now at six. That is the benchmark.”

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