Hearts administration: One bidder meets deadline

Improved offer as other bidders leave it late. Picture: Ian Rutherford
Improved offer as other bidders leave it late. Picture: Ian Rutherford
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The Foundation of Hearts appear to be a step closer to a potential takeover of Hearts after they were the only group to meet yesterday’s 5pm bid deadline.

The fans group submitted an improved offer to the club’s administrators BDO as well as proof of funding, as requested by the insolvency practitioners.

Joint-administrator Bryan Jackson was only able to confirm that he received one amended offer out of the three groups that made opening bids ahead of the 12 July cut-off point. The remaining two, former Livingston chairman Angelo Massone’s Five Stars Football Limited, and HMFC Limited, which has Peebles-based businessman Bob Jamieson as its sole director, informed Jackson that their revised offers would be submitted last night.

BDO set yesterday as a deadline for amended bids and proof of funding.

Failure of the two groups to comply with yesterday’s target time is sure to cast doubt over their respective attempts to be named preferred bidder.

Jackson said: “We received an amended offer and proof of funding from one of the bidders by the 5pm deadline and we were informed to expect the other two at some point in the evening. What happens now is that the bids will be sent off to Lithuania tomorrow and then we can hopefully move towards appointing a preferred bidder.

“All these things take time. Hopefully, within a couple of weeks we can move towards preferred bidder status.”

After reviewing the three bids that were submitted ahead of the 12 July deadline, Jackson admitted that none of the financial packages was satisfactory.

Bearing that in mind, the FoH yesterday lodged an offer in excess of the initial £2 million that they had tabled for a Company Voluntary Arrangement, while they have told BDO they will have about £3.75 million to work with for the day-to-day running of the club.

In the case of the Foundation, their CVA offer is being funded by the Edinburgh business community, and they are confident that their response will satisfy the administrators’ proof of funds request.

In a television interview conducted with STV yesterday prior to the deadline, Jackson said that “one or two [bidders] could fall away”.

Former club sponsor Jamieson is behind HMFC Ltd’s bid and has American investment company Club 9 Sports sourcing finance for a new stadium.

Speaking yesterday afternoon, he said: “We will be submitting an increased bid which should speed up the appointment of a preferred bidder.”

Little is known of Italian lawyer Massone’s bid through Five Stars Limited. Rumours circulating yesterday that he had joined forces with Gordon McKie, whose consortium backed out of the running for the club, were denied by the former Scottish Rugby Union chief executive.

Reaching a CVA compromise with the club’s creditors remains a significant obstacle for any preferred bidder, but Jackson insists the level of money available for the day-to-day operations of the club is also a big factor.

Hearts owe Lithuanian companies Ukio Bankas, which is in administration, and UBIG, which is set to be declared insolvent, a combined £25 million.

Former owner Vladimir Romanov’s bank did control 29.9 per cent of Hearts’ shares, while UBIG held 50 per cent.

Jackson, who predicts Romanov’s collapsed investment company UBIG will be officially declared insolvent within three weeks, added: “The CVA money is the amount we need to offer to our creditors to try and get them to compromise on the club’s debt. “In this case it’s really the bank in Lithuania that is the principle creditor.”

Speaking to STV, he added: “Working capital is going to be the requirements for anybody taking over the club. There is a huge gap for the rest of the season because, of the 7,000 season tickets that were sold, that money has already gone. That’s just a massive gap, they need to fill that gap. They also need to find some post-administration money in terms of they need to pay things like football debt. That can be a large amount as well.

“There is a huge amount needed for working capital, that’s one of the big issues really in terms of actually picking up a club from administration. It’s not always the offer to the creditors, which is essentially the purchase price, it’s actually the money you’re going to need to then operate the club.”