Darrell King's article in The Herald

[Tannochsidebear 2,306]

Revealed: banker’s ultimatum to debt-hit Rangers

 

Rangers’ banker has threatened to put the football club into administration

Darrell King

 

Rangers’ banker has threatened to put the football club into administration in a dramatic intervention to tackle its mounting debts.

 

 

 

Lloyds Banking Group issued the ultimatum to the club’s shocked board as the only alternative after it initially rejected a “devastating” business plan based on swingeing cuts.

 

The Herald can today reveal the extent of the turmoil at Ibrox that has left Rangers under the control of its banker. Lloyds has placed Donald Muir, who helped rescue Northern Rock, on to the board as its representative.

 

It can also be revealed that Dave King, the Glasgow-born multi-millionaire and former investor in the club, now based in South Africa, is the leading contender to buy Rangers. He has opened negotiations but is having difficulties in striking a deal for the club.

 

It is believed the price the bank wants for Rangers is Ã?£30 million, equal to the club’s total debt.

 

Sources close to the club told The Herald last night: “The business plan from the bank will only do one thing – strangle the club slowly. A new owner is a must or else Rangers will be in dire straits on and off the pitch.

 

“The board tried to fight it as much as it could, but was told it would be placed into administration. The effects of the business plan will be devastating.

 

“Dave King wants to buy Rangers, and there are others expressing interest, but the bank wants a premium price of Ã?£1 for Ã?£1 in terms of the debt so nothing is imminent in terms of a deal.

 

“Its stance is surprising when, across the country, it is selling off assets at 25p, 30p or 40p to the pound in terms of debt.

 

“But because this is Rangers, it is obviously viewing it differently. Maybe it feels wealthy fans will let their hearts rule their heads, but all the while the club is now entering dangerous grounds.”

 

There is also interest from businessmen in the west of Scotland, who could combine to add their resources to those of Mr King, or make their own moves to buy Rangers.

 

Former chairman Sir David Murray, who remained majority shareholder after he stood down on August 26, is no longer involved in making key decisions.

 

Mr Muir, who was placed on the board of Rangers nine days ago at the bank’s insistence, is now effectively running the club.

 

He has been put in to oversee an immediate attempt to reduce debts, which would include the sale of star players over the coming months subject to the bank’s approval, with no replacements.

 

The bank’s plan was put to the Rangers board this month and shocked its members, including new chairman Alistair Johnston and chief executive Martin Bain, who believe the club has to be kept as attractive as possible to lure a new owner or investor.

 

The board refused to accept the business plan the bank put in front of them.

 

However, they were told that Rangers would be put into administration – which would probably allow the bank to recover its cash – if the plan was not accepted by Friday, October 16. Later that day, Mr Muir was confirmed as a board member.

 

In the aftermath of Saturday’s match against Hibernian, manager Walter Smith admitted the bank – which is 43% owned by the taxpayer and now controls the Bank of Scotland brand – was effectively in charge.

 

Lloyds Banking Group said at the weekend: “The bank continues to be very supportive of both the club and the board as they manage the business through the more difficult economic conditions currently prevailing.”

 

Article ends

 

 

I got a call this morning from someone who has confirmed to me that the above article written by Darrell King has the true story 100% spot on. He told me who his source was that is quoted and why he was involved in the story.

 

I also hear that Murray is a busted flush and has been holed up in Perthshire for the last 3 weeks unable to run any of his businesses, as the property crash has had disastrous consequences on his portfolio and the bank have had enough.

 

Dave King is close to buying the club, but the haggling from Lloyds is preventing this from taking place. King is wanting the bank to accept 40p in the �£1 for Rangers debts, like the bank are doing to troubled Companies all over the country, but the bank are holding firm for all the debt to be repaid.

 

Over the next week or two, the campaign against Lloyds will start to gain pace to try to force them to accept King's deal. Be ready to close your Lloyds/Bank of scotland accounts and write to them expressing your disgust at their handling of the situation.

 

Bain is staying, and is apparantly fighting really hard for King's people to come through, and will be rewarded with keeping his job. (I dont like that bit, but there you are)

 

Once in, King will go to the fans with an investment plan, perhaps shares, perhaps something else, to get the fans to own more of the club, and have more of a say in the club.

 

If the bank accepts King's plan, it will give the club a debt of around �£12M, and we will have to sell 1 top player in January to get the debt down to �£10M, which will be our new manageable limit going forward.

 

The bank have been seriously threatening to put us into administration, and dont seem to believe that relegation to div 3 and no europe will have much of an effect on ST uptake!! It looks like just playing hardball, but we are no f*cking toy to be bartered around with, or some wee 3rd rate business that nobody would miss if it went to the wall.

 

As always with these rumours and counter-rumours, you are at liberty to believe what you will from the above, but anyone who knows me knows I dont post rumours, and I do know people who know people and hear things, hardly any of which I actually post on messageboards, but this is too serious to ignore.

 

Oh how we laughed at Timmy in the mid-nineties when they were 30 minutes from closure, we are not laughing now.

Edited October 26, 2009 by Frankie

[Frankie 8,145]

Hearing similar stuff this morning but unsure what to make of it at the moment...

[alexscottislegend 2,057]

I just have one question here - a couple of seasons ago our debts were supposed to be lessening, thanks to the Champions League money and I thought that as long as we kept qualifying/having a run we were keeping our heads above water. All right, there would be little money for new players but it did not sound like the doomsday scenario.

 

So what changed? Was it the Kaunas result? Did the Eufa run count for nothing?

[Tannochsidebear 2,306]

It would seem that in the summer of 2008, Walter spent �£6M on Miller, Velicka, and Lafferty in the belief that we would be selling 3/4 players (Cousin Darcheville Cuellar) for about the same amount of money.

 

We already had a decent number of players on the books, and this would have been fine if the �£10M from the CL had been forthcoming. Then Kaunas happened, and instead of then selling players, we spent more again, even allowing for the sale of Cousin and Cuellar.

 

Our wage bill and squad size was way in excess of what was coming in without any Euro football, and therefore instead of us breaking even, we were probably about �£10-�£15M down on 2008-09.

 

Coupled with a lower renewal rate of ST and no real income from player sales and the recession/banking crisis, the need to reduce debts to a more manageable level was always there.

 

The push over the edge, however, appears to be Murray's other businesses, which have been very badly affected in the last year, and we are but a part of that whole structure.

[alexscottislegend 2,057]

It would seem that in the summer of 2008, Walter spent �£6M on Miller, Velicka, and Lafferty in the belief that we would be selling 3/4 players (Cousin Darcheville Cuellar) for about the same amount of money.

 

We already had a decent number of players on the books, and this would have been fine if the �£10M from the CL had been forthcoming. Then Kaunas happened, and instead of then selling players, we spent more again, even allowing for the sale of Cousin and Cuellar.

 

Our wage bill and squad size was way in excess of what was coming in without any Euro football, and therefore instead of us breaking even, we were probably about �£10-�£15M down on 2008-09.

 

Coupled with a lower renewal rate of ST and no real income from player sales and the recession/banking crisis, the need to reduce debts to a more manageable level was always there.

 

The push over the edge, however, appears to be Murray's other businesses, which have been very badly affected in the last year, and we are but a part of that whole structure.

 

Thanks for that. Depressing though. Guess we can only hope the King deal goes through.

[Bluedell 5,329]

So according to the article, you pay off the debt of �£30m and own the club...so for your �£30m, you get the stadium, Murray Park and the players etc, and a debt free company. Seems like a good deal to me.

[ian1964 10,409]

So according to the article, you pay off the debt of �£30m and own the club...so for your �£30m, you get the stadium, Murray Park and the players etc, and a debt free company. Seems like a good deal to me.

 

That's what I was thinking BD, �£30m doesn't seem that bad when you look at it like that

[Zappa 0]

Bloody banks. They'd have the shirt off your back & leave you homeless for a fcuking tenner you owe them. You know the bank's no longer your friend when people are losing their homes for missing a single mortgage payment. The truth of the matter is that they were never your friend in the first place. You can be with a bank for 25/30 years & be a loyal model customer, but that won't gain you any loyalty from the bank. You're still just a number & they'll shaft you left right & center if they get the chance. I fcuking hate banks.

Edited October 26, 2009 by Zappa

[rbr 1,247]

So according to the article, you pay off the debt of �£30m and own the club...so for your �£30m, you get the stadium, Murray Park and the players etc, and a debt free company. Seems like a good deal to me.

 

I think that , that will be after agreement with Murray is reached on the sale price of his shares , the Debt is a seperate issue and from what I can gather it is the wrangling between King and LLoyds that is holding up any sale

[craig 5,195]

Bloody banks. They'd have the shirt off your back & leave you homeless for a fcuking tenner you owe them. You know the bank's no longer your friend when people are losing their homes for missing a single mortgage payment. The truth of the matter is that they were never your friend in the first place. You can be with a bank for 25/30 years & be a loyal model customer, but that won't gain you any loyalty from the bank. You're still just a number & they'll shaft you left right & center if they get the chance. I fcuking hate banks.

 

Come on now Shroomz, tell us how you really feel about banks :fish: