Jump to content

Rangers deal may prove to be business masterstroke


Recommended Posts

CHARLES Green's purchase of Rangers is a financial masterstroke that may prove one of the best seen in terms of financial returns, football finance experts say.

ANALYSIS: Neil Patey brokered the deal that installed Roman Abramovich as Chelsea owner in 2003.

Mr Green's Sevco consortium is unlikely to cash in its chips to former Rangers manager Walter Smith or any other would-be purchaser in the short-term unless it at least doubles its money, they believe.

They say Walter Smith's offer would leave the consortium with a profit of just £500,000, which would not be good enough.

Mr Green completed his purchase of the 140-year-old club's assets with £5.5 million, which is believed to be in the form of a loan that the club repays, having paid just £2 for Craig Whyte's shares.

Smith, the former Rangers manager, launched a last-minute bid of around £6m with businessmen, including Douglas Park and Jim McColl, and urged Mr Green to step aside.

Donald McNaught, business recovery and insolvency director at Johnston Carmichael, said that Sevco would be unlikely to sell unless it doubled its money.

"[Mr Green] has said he is in it for the longer term," he said. "And the balance sheet talks about £100m-worth of assets potentially acquired debt-free for less than £6m, which, on the face of it, is a fantastic deal.

"If you look at Rangers' footprint in terms of season ticket sales, merchandising and other revenue streams, the potential is there to make an excellent return on £5m."

Neil Patey, an Edinburgh-based finance expert who helped broker the deal that put Chelsea in the hands of Roman Abramovich in 2003, agreed Green's consortium was sitting on a potential goldmine and stood to make tens of millions.

"Celtic's market valuation right now fluctuates between over £30m and over £40m," he said. "Rangers are worth a whole lot more debt-free than it is currently.

"Rangers would be worth tens of millions debt-free. [Mr Green] could at least treble his money [in the longer term]."

He added: "Charles Green is doing what Craig Whyte tried to do. Craig Whyte just got it wrong. He got the public vote card wrong."

Mr Patey, football financial expert at accounting giant Ernst & Young, said Walter Smith's consortium might tempt the group to cash in if it offered £11m – double the price paid – but that £500,000 profit was simply no enticement.

But he agreed there remained "uncertainties and risks" to getting a newco Rangers stable. "[Mr Green] would think they won't get to the point where they will be permanently expelled and that at some point Rangers will get back to its former glory and be established in the SPL and worth a lot more money.

"You can see fans getting behind Walter Smith hugely and if fans do not buy season tickets now there would be questions in the public arena over how much further money Charles Green has," Mr Patey said.

"He still has to fund working capital next season and if he doesn't have that money, that makes things financially very difficult for him.

"On top of that, some of the players can refuse to join his newco. And if the players say they don't want to join the club, the value of what he has got in the short-term erodes."

He said Sevco also has to worry that the investigation into Rangers' previous use of dual player contracts could end up "sticking" to the newco. This involved using Employee Benefit Trusts (EBTs) to pay dozens of players over the last decade.

If it is proven the club used EBTs against league rules, Rangers could be stripped of titles.

"You could argue legally that it doesn't affect the newco but in the sporting context the authorities will say it does," said Mr Patey. "They'll say if you want to be Rangers, join the SPL and retain your history, you have to take the bad stuff as well."

http://www.heraldscotland.com/news/home-news/rangers-deal-may-prove-to-be-business-masterstroke.17891142

Interesting article, think as most of us know. Charles Green consortium will need a big cheque off of Walter Smith consortium to sell.

Link to post
Share on other sites

Im no accountant. But surely if they want to double their money, it wouldnt be too much trouble for a guy of McColls wealth.

If were talking £10m extra, ask the fans to stump up 3 or 4 million, and pump the rest in from his own wealth (to take out at a later date).

Link to post
Share on other sites

That would be awesome, if Walter Smith after completing a deal. Called a press conference with Charles Green to present a novelty oversized cheque. :lol:

i'm a fan of any situation involving a novelty oversized cheque.

Only disappointe that Charles Green didn't get one out to buy Craig Whyte's shares for a quid or whatever it was.

Link to post
Share on other sites

i'm a fan of any situation involving a novelty oversized cheque.

Only disappointe that Charles Green didn't get one out to buy Craig Whyte's shares for a quid or whatever it was.

Yeah, he missed a great opportunity.

Think everybody is a fan of novelty oversized cheques. :craphead:

Link to post
Share on other sites

Im no accountant. But surely if they want to double their money, it wouldnt be too much trouble for a guy of McColls wealth.

If were talking £10m extra, ask the fans to stump up 3 or 4 million, and pump the rest in from his own wealth (to take out at a later date).

What, you mean a loan, so what sevco get slated for it's perfectly fine for McColl to do because he has Smith on board.

If McColl and co had offered £20 million in Feb or even in March, the cva (40p approx and low admin costs) would have been accepted. They sat on their arses and watched us being liquidated and now want a debt free club.

Link to post
Share on other sites

I'm sick of the authorities stalling on every decision that has to be made .Think we bears know the real reason why this corrupt bunch at Hampden keep doing this and you just know there going to try to embarressand punch us to the max even if we start to recover .

Link to post
Share on other sites

What, you mean a loan, so what sevco get slated for it's perfectly fine for McColl to do because he has Smith on board.

If McColl and co had offered £20 million in Feb or even in March, the cva (40p approx and low admin costs) would have been accepted. They sat on their arses and watched us being liquidated and now want a debt free club.

No it wouldn't have. HMRC were never going to accept a CVA, because a newco allows them to go after the people responsible for the tax issues.

Link to post
Share on other sites

Im no accountant. But surely if they want to double their money, it wouldnt be too much trouble for a guy of McColls wealth.

If were talking £10m extra, ask the fans to stump up 3 or 4 million, and pump the rest in from his own wealth (to take out at a later date).

I fear you've missed the concept of negotiation

Link to post
Share on other sites

No it wouldn't have. HMRC were never going to accept a CVA, because a newco allows them to go after the people responsible for the tax issues.

It's a matter of opinion.

HMRC could reject 8p in the pound, but no way would they have rejected 40p.

Any offences committed, can still be investigated and prosecuted without a liquidator. Unfortunately I wouldn't be holding my breath waiting to see either of the 2 cunts responsible in a court.

Back to my original point. Why can McColl loan us money and not be criticised?

Link to post
Share on other sites

What, you mean a loan, so what sevco get slated for it's perfectly fine for McColl to do because he has Smith on board.

If McColl and co had offered £20 million in Feb or even in March, the cva (40p approx and low admin costs) would have been accepted. They sat on their arses and watched us being liquidated and now want a debt free club.

It's a strange one really I mean if anyone had said you could have bought Rangers for £20 million anyone would have thought that was a bargain ... the only thing I can think is the EBTs were still lurking and if the worst had happened there the price would have rocketed

Link to post
Share on other sites

No it wouldn't have. HMRC were never going to accept a CVA, because a newco allows them to go after the people responsible for the tax issues.

You're not the first person Ive heard say that no way HMRC would have accepted £20 million or 40p in the pound. Can you tell me how you know this as fact? I would love to know, because I firmly believe they would have bit the hand of anyone for £20 million IMO.

Link to post
Share on other sites

You're not the first person Ive heard say that no way HMRC would have accepted £20 million or 40p in the pound. Can you tell me how you know this as fact? I would love to know, because I firmly believe they would have bit the hand of anyone for £20 million IMO.

A liquidation provides the best opportunity to protect taxpayers, by allowing the potential investigation and pursuit of possible claims against those responsible for the company's financial affairs in recent years.

A CVA would restrict the scope of such action. Moreover the liquidation route does not prejudice the proposed sale of the club.

HMRC also has a policy against agreeing to CVA's with businesses that have a history of non-compliance with tax payments, which unfortunately we have.

Link to post
Share on other sites

HMRC also has a policy against agreeing to CVA's with businesses that have a history of non-compliance with tax payments, which unfortunately we have.

Really.

Then why did the admins, Green, The Blue Knights all want to go the cva route? You would think that this policy would have been communicated to the admins very early on in this process.

Why do they do deals with vodafone, Goldman Sachs and countless others?

HMRC would have accepted 40p in the pound, they didn't accept 9p at best, because they can get damn near that (or more) from the asset sale, outstanding transfer money and whatever Collyer Bristow settle for.

Trotting out lines from HMRC doesn't make it a fact. Look at what they have done previously and you will see that statement is complete and utter lies.

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Restore formatting

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share

  • Upcoming Events

    • 18 January 2022 19:45 Until 21:45
      0  
      Aberdeen v Rangers
      Pittodrie
      Scottish Premiership
      Live on Sky Sports Football and Sky Sports Main Event
×
×
  • Create New...