FOUNDATION of Hearts chairman Ian Murray has warned his group will not be able to make up any funding shortfall to keep the club afloat for the remainder of the season if no agreement is reached on Company Voluntary Arrangement with the club’s Lithuanian creditors tomorrow.
Hearts administrator Bryan Jackson will travel to Vilnius today in the hope of bringing to a conclusion the protracted negotiations over the transfer of shares from Ukios Bankas and UBIG that would allow Hearts to exit administration, subsequent to a 20-day notice period. Jackson, of BDO, has previously stated that tomorrow’s much-delayed CVA meetings must concluded successfully since there are only sufficient funds to run the club until the end of the month. And, earlier this week, he expressed concern over that outcome in light of the delays in signing off a CVA that appeared to be agreed in principle as far back as last November.
Both Ukios Bankas and UBIG, the collapsed Lithuanian banking operations of former Hearts owner Vladimir Romanov, are themselves now in administration, and Jackson therefore requires to deal with each individually. Ukios own a 28.79 per cent stake in the club and also holds a charge on Tynecastle Stadium, while UBIG has a 50 per cent holding in the Gorgie team.
It has been reported that the £2.5 million offer from the Foundation of Hearts, made under the auspice of prospective owner Ann Budge’s BIDCO purchase vehicle, is now being questioned by creditors in Lithuania, who are not convinced that a better deal for the stadium could not be struck.
Jackson has attempted to demonstrate to the parties involved that any further delays would only result in the loss of the £2.5m on offer, and Murray confirms this is no case of brinksmanship.
“We are hopeful that Monday’s meeting will bring a positive conclusion but if it does not we cannot use the Foundation’s money to run the club,” said Murray, pictured. “We have no authority to use that unless we have a cast-iron guarantee that a deal will be done, in the form of written confirmation.
“We are between a rock and a hard place. There is no way money could be ploughed into the club only for it to end up in liquidation. We can’t, and BDO can’t, continue in this state of flux where we don’t know if matters will stay the way they are for ten months or three years.”
There have been some suggestions that at the Lithuanian end there could be a feeling retaining the stadium and leasing it to Hearts could be a greater earner than accepting the £2.5m on offer.
A source close to the Tynecastle club yesterday dismissed that notion in stark terms.
“If the deal doesn’t go through, a newco Hearts will be a fourth tier club and unable to afford to rent out Tynecastle,” he said. “A group in Lithuania would then be left with an empty sports arena in Gorgie with no use and no real estate value.”
Hearts were relegated from the Premiership yesterday despite winning 4-2 at Partick Thistle.
St Mirren’s late win over Motherwell condemned Hearts to the drop into the Championship for the first time since 1981.