Another "asset" mortgaged off

[Calgacus 8]

I don't think it is anything important and simply follows on from the earlier assignation of the catering contract to Close Leasing.To keep things simple, the Bank of Scotland had a Security called a Floating security over all the Assets of Rangers, which the Bank transferred (assigned) to Whyte's Company when he bought the Club. Subsequently, the Club granted Close an assignation of the catering contract income. This is a type of security but as the asset is already subject to the earlier floating charge, for it to be effective, Whyte's company had to agree to the Floating Charge to be amended so that Close would have first call on the catering contract. This is what the latest notice is about. It doesn't seem to be anything new.

[Calgacus 8]

oops meant to say Floating Charge not Floating Security in the second line!

[calscot 0]

Seems to me that there is a strategy being worked on that is to protect both Rangers and Whyte from the possible repercussions of losing the tax case.

 

Basically as far as I can fathom, Whyte has yet to actually put more than a pound into Rangers. After flicking the coin over the table to SDM all he has then proceeded to do is to take on Rangers' debt from Lloyds - but still as a loan.

 

Since then as the OP points out he's raised working capital via offsetting future income and has also had to use this to offset frozen bank assets.

 

I think he put some working capital in at the beginning but that still seems like a loan rather than a cash investment or donation.

 

At the moment it looks to me like he's trying to run the club on it's own income rather than put any of his own money in and while that can look dodgy, it logically follows that the less money he puts in, the less the tax man can hoover up if the case goes against us. But to do this he needs the future income now for cash flow purposes and some capital investment.

 

I can't imagine his long term goal is to pull the wool over everyone's eyes and completely acquire Rangers for the total sum of £1 and renegue on all investment promises. It could be his eventual effective purchase price is more like say £30M with that money invested either in waiving the club debt and investing in the playing squad, or use it to come to some sort of deal with the tax man.

 

Until the case is decided, his wallet needs to stay in his pocket.

 

It seems to me that at the beginning he was bullish about winning the case and so made promises that he has yet to deliver. After the financial hole created by the exit of Europe, he's shut up shop and the noises about the tax case have become less confident and the worst case scenario being prepared for.

 

While that looks bad on the outside, such a stance could save us from going out of business. If we win the case then I suspect the dark clouds will disperse and the money will start rolling in, starting with waiving the debt.

 

That's just a layman's theory that makes some kind of sense to me.

[chilledbear 16]

I wouldn't say I was an idiot, but I've got to admit I'm lost as far as this is concerned.

[GovanAllan 0]

I wouldn't say I was an idiot, but I've got to admit I'm lost as far as this is concerned.

 

Join the club mate I just want to be a football fan. :smile:

[forlanssister 3,050]

I can't imagine his long term goal is to pull the wool over everyone's eyes and completely acquire Rangers for the total sum of £1 and renegue on all investment promises. .

 

On the contrary I think it is his goal and there's bugger all anyone can do to stop him, this has always been the sum of the parts is greater than the whole deal. You can dress it up anyway you like but Whyte's total risk is £1.

[Zappa 0]

You can dress it up anyway you like but Whyte's total risk is £1.

 

Precisely.

 

Any money he actually invests in the club will be automatically treated as a loan and due to be paid back if the club suffers insolvency.

[bluebear54 0]

I wouldn't say I was an idiot, but I've got to admit I'm lost as far as this is concerned.

 

Hey CB. Join the club. Infinitely better than saying "I wouldn't say I was concerned, but I've got to admit that I'm lost and I'm an idiot.

These type of things go way over my head, and I end up relying on some good professional opinion from some Gersnet board members.

Edited November 2, 2011 by bluebear54

[calscot 0]

My theory is that there are the following main scenario plans:

 

A. We win the tax case - Whyte waives the 18M debt, the other tax bill and puts up several million for transfer fees plus some investment the stadium such as the big tvs. Rangers are now debt free and healthy financially.

 

B. We lose the tax case and HRMC do a deal with us for say something like £15M - Whyte pays the bill, repays some future earnings but the club will have to pay back the £18M of debt over the next five years. Whyte has some millions to invest in the squad and stadium.

 

C. We lose the tax case and HRMC do a deal with us for say something like £25M - Whyte pays the bill, repays some future earnings but the club will have to pay back the £18M of debt over the next five years and cuts will have to be made with limited transfer fees.

 

D. We lose the tax case and HRMC refuse to deal and demand something like £50M - Whyte puts the club into administration and creditors including HRMC are offered so much in the pound for the monies owed. If they accept, Whyte pays some of the bills, writes down his own debt and over next five years the club will have to fulfill those reduced debts and cuts will have to be made with bugger all transfer fees. We will have at least a 10pt deduction and unlikely to win the league.

 

E. Same as D but creditors refuse to budge - Whyte liquidises the club and uses the assets starts a new one using the Pheonix scenario. Liquid assets are stripped to pay creditors, Whyte loses most of his £18M but owns the new company. Rangers readmitted into the SPL with heavy sanctions and no European football for three years. Club will be stable but with reduced assets. Players will probably have to be sold and income will be reduced from no European football. Highly embarrassing for the club and a break in its continuity. Lots of slagging from Celtic and claims our haul of trophies no longer counts for the new club.

 

In all scenarios I see Whyte as exposed to an "investment" of £25M to £30M - his "effective" purchase price for RFC.

 

However, I could be totally wrong. Just trying to make some sense of things and the above seems consistent with what's I've read and understood that's been happening.

 

There is also other significant but lesser cases such as the lesser tax bill and the two suing, former employees.

 

Whyte may only have spent a pound so far, but the tax case is pivotal.

Edited November 3, 2011 by calscot

[forlanssister 3,050]

My theory is that there are the following main scenario plans:

 

A. We win the tax case - Whyte waives the 18M debt, the other tax bill and puts up several million for transfer fees plus some investment the stadium such as the big tvs. Rangers are now debt free and healthy financially.

 

C. We lose the tax case and HRMC do a deal with us for say something like £15M - Whyte pays the bill, repays some future earnings but the club will have to pay back the £18M of debt over the next five years. Whyte has some millions to invest in the squad and stadium.

 

C. We lose the tax case and HRMC do a deal with us for say something like £25M - Whyte pays the bill, repays some future earnings but the club will have to pay back the £18M of debt over the next five years and cuts will have to be made with limited transfer fees.

 

D. We lose the tax case and HRMC refuse to deal and demand something like £50M - Whyte puts the club into administration and creditors including HRMC are offered so much in the pound for the monies owed. If they accept, Whyte pays some of the bills, writes down his own debt and over next five years the club will have to fulfill those reduced debts and cuts will have to be made with bugger all transfer fees. We will have at least a 10pt deduction and unlikely to win the league.

 

E. Same as D but creditors refuse to budge - Whyte liquidises the club and uses the assets starts a new one using the Pheonix scenario. Liquid assets are stripped to pay creditors, Whyte loses most of his £18M but owns the new company. Rangers readmitted into the SPL with heavy sanctions and no European football for three years. Club will be stable but with reduced assets. Players will probably have to be sold and income will be reduced from no European football. Highly embarrassing for the club and a break in its continuity. Lots of slagging from Celtic and claims our haul of trophies no longer counts for the new club.

 

In all scenarios I see Whyte as exposed to an "investment" of £25M to £30M - his "effective" purchase price for RFC.

 

However, I could be totally wrong. Just trying to make some sense of things and the above seems consistent with what's I've read and understood that's been happening.

 

There is also other significant but lesser cases such as the lesser tax bill and the two suing, former employees.

 

Whyte may only have spent a pound so far, but the tax case is pivotal.

 

Sadly I think scenario E is the most likely outcome, and what a f*&king mess that will be!