Comment on Bad Money? by Homunculus.

    easyJambo 6th August 2019 at 17:52


    Am I right in saying that Dave King, his associates and their supports (Incl Club1872) now have in excess of 75% off the shares in the PLC and absolute control over everything, including special resolutions.

    Homunculus Also Commented

    Bad Money?
    Cluster One 4th August 2019 at 10:41


    Indeed, as they are secured creditors.

    However as soon as SD have a legally enforceable debt (even if unsecured), and TRFC don't pay it, then there is nothing to stop them moving for a winding up order. 

    The defence against that would obviously be placing the club into administration, and that's when things start to get really messy.

    The only other option is paying them what they are owed.


    Bad Money?
    Allyjambo 3rd August 2019 at 11:04


    This seems to relate to what you are saying

    "With the support of 75% (by value) of the unsecured creditors who choose to vote on the proposal (at least 50% of whom must not be connected to the company), a company can use a CVA to impose legally binding terms on dissenting unsecured creditors"

    So the holding company would have even less control over a CVA of it's subsidiary than it would normally have due to the level of debt.

    So the issues with administration for TRFC and using that to "shed debt" would include.

    1, Dealing with the unsecured creditors.

    2, Getting a CVA through.

    3, Getting an administrator who wouldn't decimate the staff at all levels.

    4, The fact that the debt being shed is mostly to the PLC in the first place.

    5, Having a viable business going forward.

    Liquidation of the assets individually to raise cash for the creditors just seems like a much more realistic prospect if you want to raise money.

    The alternative, selling the whole lot for £1 brings in the sum total of £1 for the creditors but loses all of the assets, all of the debt, everything. Why would King etc want to do that. Who would want to take it on.


    Bad Money?
    Allyjambo 3rd August 2019 at 09:40

    I'm not disagreeing with you AJ, just pointing out that it is the parent company (controlled as you say by King) who will be the major unsecured creditor. In an administration they would be looking at what was left over after the secured creditors were dealt with.

    The current assets with security over them are 

    (1) All and whole the subjects on the west side of Broomloan Road, Glasgow registered in the Land Register of Scotland under title number GLA68492; and

    (2) All and whole the subjects known as Edmiston House, Harrison Drive, Glasgow, G51 2YX, being the subjects registered in the Land Register of Scotland under title number GLA29534 and GLA62016.

    (3) Training Centre Youth Academy, Auchenhowie Road, Milngavie, Glasgow 

    (4) Floating charge

    Unless there are rules against it, RIFC will be the creditor which will agree to accept or reject a CVA. So basically writing off tens of millions in debt or liquidating the assets of TRFC to get the cash in to then distribute between the shareholders, King included.

    That's if the administrator sees a Ltd Company which is a viable business going forward, after having decimated the playing squad, sacking staff, and cutting costs wherever possible. 

    I just don't see the fantasy scenario where someone comes in and buys the subsidiary with all of it's assets for £1. I have been wrong before though. 



    Recent Comments by Homunculus

    In Whose Interests
    Morelos is a good goalscorer and will be sold for a decent fee. Possibly even enough to balance the books this year, depending on how much the club have to pay out over and above the £10m shortfall.

    He will be sold when the first respectable offer is made.

    The question is, who is going to replace him. If the answer is Defoe that really is a short term solution.

    In Whose Interests
    It's interesting the the impecunious one struggled so badly when he was instructed to make an offer to buy shares. Practically impossible to move money apparently.

    However when it is required to sign off on the audited accounts he can glibly offer up £5m if required, presumably with the permission of the trustees.

    One is forced to wonder how the trustees see this as a good investment and use of the funds they control.

    In Whose Interests
    A common sense look at the Rangers accounts 2019 and what they really mean.


    Or possibly not.

    In Whose Interests
    StevieBC 2nd November 2019 at 10:08

    If there are no credit facilities and it is a cash only business then I would imagine its pretty much risk free to Barclays.



    The RIFC Group maintains cash to fund the daily cash requirements of its business. The Group does not have access to any further banking facilities.

    As at 30 June 2019, there are interest-free, unsecured loans with investors amounting to £10.3 million, other commercial loans of £3.0m, whilst the Group also has finance lease agreements totalling £1.2 million.

    As at 30 June 2019, the Group held £1.0m within cash and bank balances.


    In Whose Interests
    easyJambo 1st November 2019 at 23:18

    I was thinking similar. Speaking about the EBIDTA break even in the interim accounts suggested an actual c£4m – £5m loss at the end of the year to me.

    The fact that it is more than double that is a bit of a shock.

    Adding to that a predicted loss of £10m this year, based on player purchases over the summer (Kent et al) strikes me as just recklessness. 

    Meet the new club etc.