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£1.5m loans for Rangers are 'part of the plan'

by MARTIN HANNAN

Updated on the

25 February

2014

00:14

Rangers' decision to borrow £1.5 million in short-term loans from two of the club's biggest shareholders was pre-planned as part of the financial and organisational restructuring of the Ibrox club, according to chief executive Graham Wallace.

The Rangers Football Club Limited yesterday confirmed to the stock exchange that director Sandy Easdale and single biggest shareholder Laxey Partners were lending the club £500,000 and £1 million respectively for 'working capital'.

Both sums are secured against the Edmiston House and Albion car park facilities near to Ibrox. The loans are repayable by 1 September, and while Easdale will not make a single penny, Laxey Partners, the Isle of Man-based hedge fund who are the club's single-biggest shareholder with an 11.64 per cent stake, could make a £150,000 profit on their part of the deal.

The club's Nominated Adviser (NOMAD), Daniel Stewart and Company plc, has approved the Laxey deal as "fair and reasonable" but fans groups last night questioned the Laxey loan in particular.

Speaking after the announcement, Wallace said fans should not be concerned about the borrowing, which he said was "always part of the plan".

The Scotsman can reveal that the restructuring which is already under way will see Rangers' mid-year financial results, due out late next month, show a massive improvement on last year's £14 million loss in just 13 months.

Ibrox sources can neither confirm or deny the mid-year figures, but The Scotsman understands that the losses, which were running at £1 million per month, have been significantly reduced.

While not commenting on the forthcoming results, Wallace was nevertheless bullish about the club's future on and off the field and he launched his fiercest criticism yet of those who are predicting that Rangers will go into administration again, branding them "irresponsible" and pointing out that there is no need for administration as the club has no debt – the overriding factor in bringing about administrations. "We have no bank debt, we have no overdraft, and we have a debt-free balance sheet which would be the envy of most clubs," said Wallace, "yet we keep getting drawn back in to the question 'is Rangers in crisis' which seems to me to be rather unique.

"There is no prospect of this business going into administration. I have staked my personal reputation on it. I do get frustrated with the constant use of the word administration, because what it can tend to do is potentially spook the wider fan base.

"When you look at what has happened at the club over the past couple of years, you could understand why certain segments of the fan base could be concerned when they read in the newspapers or hear comment from the media about a second administration.

"To my mind, sometimes there is a sense of irresponsibility when people start to use that word."

The chief executive is only too aware that the short-term loans by Easdale and Laxey Partners need to be repaid by September, and in effect it is 'tide me over' money until the season-ticket income starts to roll in once Rangers secure their inevitable League 1 title. They play Stranraer at Stair Park tonight, looking to extend their 21-point gap at the top of the table.

Wallace explained: "It is a short-term facility that we will use as required over the next three to four months, and the important message is that this has always been anticipated in the business plan that I inherited and which we are working our way through.

"There was always a need for some short-term funding. The quantum of it was to be determined, and we were looking for the best way to source it. This is not a last-minute crisis panic move, this is just consistent with what I would regard as doing business in the right way. Football clubs are very cyclical in terms of their revenue generation and at the rate at which they spend money.

"Typically this period at the end of the financial year tends to be the time when you are looking forward to income coming in, and not just talking about season ticket income, as we have significant inflows from commercial partnership deals and from our retail business joint venture. So really all we are doing is putting in place a facility that gives us a little bit of financial headroom."

Promising that everyone at Ibrox was working hard "to get the fundamentals sorted out", Wallace was adamant that borrowing from major shareholders was preferable to approaching banks for the same loan facilities.

"We see it as a really positive step for the club," said Wallace, "as they are demonstrating their support for the board and the management."

Last night the Rangers Supporters Association, Assembly and Trust issued a statement saying they had been contacted by a number of supporters, who are also current shareholders, indicating they would have provided a secured loan of £1.5m on more favourable terms than the combined Laxey Partners and Easdale loans.

"The terms of the Laxey loan in particular seem unduly onerous," stated the three groups. "We are concerned that not all shareholders are being treated equally. Fans and shareholders both deserve an explanation as to why other shareholders were not approached to provide this loan. The three groups call on Rangers, or the NOMAD Daniel Stewart, to clarify the matter. Either in public or through a direct meeting with fan representatives. We have contacted both companies with our concerns."

Meanwhile, Wallace is midway through the 120 days he asked for in order to examine the club from top to bottom and then change what is necessary to safeguard and improve Rangers' future. The club's forthcoming results will show if he is true to his word about Rangers changing for the better.

************************************************************************************************

GRAHAM WALLACE last night revealed he has held fresh talks with Dave King over a possible return to Rangers.

But the Ibrox chief claims former Gers director King has not made any funding offers to the board.

Wallace believes King may only become involved in the event of a new share issue.

Wallace said: The board have been in contact with Dave recently and he has been in touch with us. He has intimated to Rangers he would be willing to participate as an investor, if and when we decide to do further equity raising.

Dave has made no offers or suggestions to us other than that.

It is important to state that in any future equity raising, we would expect existing shareholders to be strongly interested in standing behind that.

Wallace spoke out to allay fans fears over the £1.5million crisis loan banked by Gers. The Ibrox supremo insists the cash was not required to stave off administration.

He also shot down claims the loan will be used to pay players wages this month.

Wallace added: Even if we had chosen not to do this, there were several avenues available to us. There was never any threat of administration. The facility won't specifically be used to pay wages this month. There is sufficient funding in the business to cover that

Gers director Sandy Easdale has pledged £500k of the cash for no payment.

But Laxeys will charge 15 per cent interest on their six-month £1m loan ? payable in cash or Gers shares. The funding is also secured against the Albion Car Park and Edmiston House leaving Gers fans worried.

But Wallace insists the club's assets will NEVER be flogged.

He said:

There is no intent to do a sale and leaseback on any of Rangers assets.

What we have done is put up two pieces of property the club owns as security.

The terms of the deal have been reviewed and approved by the board as being acceptable. I appreciate fans have been sceptical in the past in terms of previous regimes.

But people will see in the fullness of time we are moving in the right direction.

Ibrox gaffer Ally McCoist admits the financial uncertainty at Gers means he can't yet make any plans for new signings.

McCoist said:

I don't know what's happening regarding my budget. I'm in the dark.

I don't know if I'll be restricted to Bosmans, although I could hazard a guess that might be the case.

Meanwhile, Gers fans last night claimed they could have secured the £1.5m loan on better terms.

The Rangers Supporters Association, Assembly and Trust issued a statement slamming the 15 per cent interest charged by Laxeys.

It read: Fans and shareholders both deserve an explanation as to why other shareholders were not approached to provide this loan.

http://tinyurl.com/q3hfcgj

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good interview. I anticipate about 15 pages by the time I wake up tomorrow :lol:

if he is adamant that going to shareholders is a better option than going to banks, that seems to suggest he hasn't chosen to use the 2.5 from metro bank.

Oh I am sure by that time it will be unrecognisible after it is altered and rewritten to suit. :lol:

The writer Martin Hannan couldn't even get the % size of the Laxey shareholding correct. Piss poor journalism as per usual.

It could have been worse he could have been zillions out on his shares to loan fee guesstimate. :matron:

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Wallaces words always make me feel better.

If it was all.going tits up behind the scenes or he was being undermined then he isn't the type of guy to take that, he would be off so that's a big comfort to me.

If the results really are good then happy days, I'll continue to support this board and in particular Wallace in his restructuring and continue to put my faith in his ability to turn this club around in time

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to anyone:

Do you agree that Wallace has a good reputation?

Do you think he would put it on the line for 300k or so per year that he is earning for working with us?

Unless you believe Wallace is a spiv and lying to us, then surely he is worth listening to before listening to the papers and doommongers?

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When are they due?

he Scotsman can reveal that the restructuring which is already under way will see Rangers' mid-year financial results, due out late next month, show a massive improvement on last year's £14 million loss in just 13 months.

.

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to anyone:

Do you agree that Wallace has a good reputation?

Do you think he would put it on the line for 300k or so per year that he is earning for working with us?

Unless you believe Wallace is a spiv and lying to us, then surely he is worth listening to before listening to the papers and doommongers?

Momentum seems to be growing with that opinion.

Was always too much to expect certain people to give him a fair chance.

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Momentum seems to be growing with that opinion.

Was always too much to expect certain people to give him a fair chance.

I don't get why.

Of all the things that have happened in the past two years, there has been a lot to get angry about, but so far, I can't think of a single thing Wallace has done wrong.

He has given no reason not to at least give him 120 days, it's baffling why people are suddenly up in arms

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I don't get why.

Of all the things that have happened in the past two years, there has been a lot to get angry about, but so far, I can't think of a single thing Wallace has done wrong.

He has given no reason not to at least give him 120 days, it's baffling why people are suddenly up in arms

They moaned that the likes of Mather weren't qualified enough, Wallace clearly is and it's still not good enough.
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But but but an rst chap on here said he had made two offers......

GRAHAM WALLACE last night revealed he has held fresh talks with Dave King over a possible return to Rangers.

But the Ibrox chief claims former Gers director King has not made any funding offers to the board.

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he still needs:

drastic cost reduction

a complete overhaul of the footballing side of the business

meaningful new revenue streams

IMO the cost reduction does not need to be massive as our revenue streams are going to increase.

I hope the way forward for us is going to be setting us a great scouting team, using them to bring in some of the cheaper talent out there with the potential to moving them on and bringing in cash.

I'd want profit made from transfer dealing put back into the team so it eventually becomes self generating ( not sure if that is the correct term).

If we are ran correctly then we have amazing potential to grow.

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laxley,irvine and the easdales, will save us. we wil get loans from them,which they will make them massive profits for themselves and take money for club.and supporters. time for us to wake up. its taking us a long time

You're still here? :lol:

What exactly is wrong with these guys making money?

They loan us money, we pay them back, plus a bit extra for Laxey, then they have more money which later on may be used for other business ventures, such as reinvesting.

It's how business works.

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being cavelier in our spending is a plan by the easdales and and laxley so that they can lend us money . then they can take control of our assetts achenw

hoie ibrox and everthing else .we need to wise up. they are not un this for the benefit of our club

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