Rangers’ bid for new share issue falls short

Chairman Dave King and Vice-Chairman Paul Murray at the club's AGM. Picture: SNS
Chairman Dave King and Vice-Chairman Paul Murray at the club's AGM. Picture: SNS
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RANGERS have failed in their bid to launch a new share issue aimed at raising funds to address the ongoing cash shortfall at the club.

A special resolution, requiring the backing of 75 per cent of shareholders, was put to last Friday’s annual general meeting, seeking permission to “allot equity securities of the company wholly for cash pursuant to the authority of the directors”.

The resolution would have allowed Rangers chairman Dave King and his board to issue new shares which would have been available to outside investors without having to offer them exclusively to existing shareholders.

But King and his colleagues failed by 1.2 per cent to have the move passed. The results of the agm vote were announced yesterday, revealing that 73.8 per cent voted in favour of the special resolution with 26.2 per cent against.

The move had been opposed by Sports Direct owner Mike Ashley’s MASH Holdings, who have an 8.92 per cent shareholding in Rangers, with a threat to seek an interim interdict to prevent the new shares being issued if the resolution was passed.

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“The votes were considerably higher than the directors had anticipated and almost enough to see the vote carried as a special resolution,” a statement from Rangers said.

“The directors will consider carefully shareholders’ views on this vote, consult (where practicable) with those who did not vote or opposed the resolution and identify the company’s next steps after that process is complete.”

Rangers posted a loss of £7.5 million in their most recent annual accounts which stated they would need “up to £2.5 million by way of debt or equity funding” before the end of this season to meet their financial liabilities.

That funding requirement has since been addressed by King and the ‘Three Bears’ consortium of investors - Douglas Park, George Letham and George Taylor - who are making further ‘soft loan’ facilities available to Rangers.

A separate ordinary resolution at the agm, which required just 50 per cent backing of shareholders, was approved which allows the board to issue shares in the company to current shareholders up to a defined limit of around £550,000.

That move was supported by 74.3 per cent of shareholders and opposed by 25.7 per cent. Similar results approved the other ordinary business of the agm, including the re-appointment as directors of King, Paul Murray, John Gilligan, Graeme Park and John Bennett.

Rangers’ oldco liquidators BDO, meanwhile, are waiting to discover if they are granted leave to appeal the Court of Session’s final judgement on the use of Employee Benefit Trusts to pay players between 2001 and 2010.

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Their application was lodged in advance of today’s deadline. No timeframe has been set for a response to the application. If it is granted, the appeal will be heard by the Supreme Court in London. Should the Court of Session refuse BDO leave to appeal, they are then entitled to apply directly to the Supreme Court for permission to appeal on grounds of “general public importance.”

The Inner House of the Court of Session last month overturned two previous tribunal decisions and ruled in favour of Her Majesty’s Revenue and Customs that the EBT scheme used by former Rangers owner Sir David Murray’s group of companies breached tax laws.

It re-opened debate over the legality of trophies won by Rangers during the period concerned, with calls from some quarters for them to be stripped of titles.

Speaking at last Friday’s agm, Rangers chairman King stated there was “absolutely no chance” of that happening, while club secretary James Blair added that “there is absolutely no legal case for that to happen.”

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