Rangers chairman Dave King and his fellow investors will extend their loan facilities to the club by a further £7.2 million over the next 18 months in order to stave off any threat of another financial crisis.
A loss of £6.7 million for the year ending 30 June 2017 was revealed when Rangers published their annual accounts last night, slightly more than double the £3.3 million deficit they posted the previous year.
The Ibrox club’s turnover increased by £7 million to £29.2 million in the same period but also saw operating expenses rise by £8 million to £32.9 million. That included a payment of £3 million to Sports Direct to terminate the unpopular retail agreement negotiated by the previous Rangers board.
King’s report in the accounts makes a forecast that a minimum of £4 million of additional funding will be required by the end of this season in order to meet liabilities as they fall due. Further funding amounting to £3.2m is forecast to be required during the 2018/19 season, although the final amount is dependent on future football performance and European football participation amongst other factors.
New Oasis Asset Limited, King’s family trust fund, have agreed to provide additional loan facilities as necessary, while other investors will also extend their existing loan facilities until July 2019.
“The board is satisfied that those parties will continue to provide financial support and have satisfied themselves as to the validity of the undertakings,” says the report. “The board acknowledge that had these assurances not been secured then a material uncertainty would exist which may cast doubt over the group’s ability to continue as a going concern and therefore its ability to realise its assets and discharge its liabilities in the normal course of business. With the appropriate assurances obtained and the continued support of the investors, the board believe that such uncertainty has been removed.”
Rangers, who will hold their annual general meeting in Glasgow on 30 November, hope to secure agreement to launch a share issue in 2018 to raise fresh funds.
“The board and the executive again have had to work extremely hard over the last year to deal with a wide range of issues and we will continue to do so in what remains a very challenging operating environment,” said King.
“During the year under review I am pleased to say the board secured an extremely favourable outcome to the long-running litigation with Sports Direct and the club will benefit enormously from that outcome.
“Rangers supporters are aware of the difficulties that have been overcome and of the challenges in front of us but their loyalty, which has been a true constant, means we cannot fall short of or fail to reach our shared objectives. Rangers must regain a dominant position at home and compete meaningfully again in Europe but neither goal will be reached without the backing of our supporters. All our work and diligence is for them.”