Zappa 0 Posted August 21, 2013 Share Posted August 21, 2013 Analysis: only money will solve Rangers' board crisis Wednesday 21 August 2013 by Richard Wilson Even the departure of Charles Green involved a contradiction. It was first reported that he stood down, then Rangers' statement to the Stock Exchange later yesterday afternoon said that his "consultancy agreement" had been "terminated", and finally a club statement said that the board's decision had been "unanimous". However it was phrased, the Ibrox directors decided that the club needed to sever its ties with Green, again, to try to find a route out of its current difficulties. Context is significant, though, and the immediate future remains an uncertain proposition. Green, after all, remains the largest single shareholder and has an alliance with James Easdale, the Ibrox director, and Sandy Easdale, who are both shareholders and who have stated their intention to increase the size of their stake. Other board members have been distancing themselves from the one-time chief executive, and the statement to the Stock Exchange revealed it was Craig Mather, his successor, who held the talks with Green to inform him of the termination of his contract. Had Green stayed, it would have been an indication that the Yorkshireman and the backers he retains among the shareholders were still the most significant power brokers at the club. Even now, Green could in theory requisition another General Meeting in the future, if he believes he has enough votes to carry the resolutions. As of last night, though, the current situation was at an impasse, but a solution needs to eventually be found. People are currently jostling for control of the board. Some shareholders were uncomfortable with Green's presence and influence. They requisitioned a General Meeting, with resolutions seeking the removal from the board of Mather, the finance director Brian Stockbridge and the non-executive director Bryan Smart; then proposed the appointment of Paul Murray, the former Rangers director, and Frank Blin, the former executive chairman of PricewaterhouseCooper. The requisition is backed by several of the institutional investors, as well ?¨as the Glasgow businessman and entrepreneur, Jim McColl, and they may believe that going to the GM and being confident of winning the vote means that there is no need to compromise. They have more to gain from winning the GM than they do from accepting a solution. Ultimately, though, the question is about money. Green and his backers will only accept a certain price for their stakes, and he has said himself that he would take an offer of 50p per share. Some wealthy Rangers fans, such as the former director Dave King, are prepared to put money into the club, but do not want to pay Green and his backers a premium for their shares. That, in part, is because the club itself needs money. Before the end of the season, Rangers will require additional investment. There is £10m left in the bank, according to Stockbridge, and that will not carry the club through until next year's season tickets are sold. Green has a track record of raising funds, since last year's Initial Public Offering of shares brought ?¨in £22m. Yet that money has been spent, as has much of two years' worth of season tickets. Cost-cutting is required, but that alone will not be enough to stabilise Rangers. The existing shareholders, if they can be persuaded that the business plan will generate increased revenue and so the share price will see its value restored, may then be willing to submit themselves to a new round of funding. Many might be wary of new shares being issued, since it would potentially dilute their own shareholdings, but the likes of King would be keen to receive a stake in the club in return for financing it. If new stock was issued at 70p, the original launch price, the existing shareholders may be more willing to accept a second share issue. It is these financial issues that are underpinning the moves being made to alter the make-up of the board, as well as possibly facilitating a change in the balance of the shareholder base. The closing price of the Rangers shares yesterday evening was 43p. The fall has been stymied in recent weeks, but may react to further large sales - around two million changed hands in only two single transactions last week, when the former commercial director Imran Ahmad reportedly sold the bulk of his shareholding - but also the GM, the accounts that are due next month, and the annual general meeting that must follow. Control of the board means controlling the costs and controlling how new investment is sought. It may also allow an element of control on how the shareholder base changes. These are high stakes, and the brinksmanship will continue. Money is always the most powerful motivator. http://www.heraldscotland.com/sport/football/analysis-only-money-will-solve-rangers-board-crisis.1377061682 0 Quote Link to post Share on other sites More sharing options...
Zappa 0 Posted August 21, 2013 Author Share Posted August 21, 2013 (edited) A decent Analysis by Richard Wilson. [Edit: made a mistake about insinuations. Turns out the Herald website has a formatting issue going on at the moment.] Edited August 21, 2013 by Zappa 0 Quote Link to post Share on other sites More sharing options...
bossy 0 Posted August 21, 2013 Share Posted August 21, 2013 McColl will be telling investors - especially institutional ones - that if the current management is allowed to stay in place then Rangers will end up in administration again and they will lose their money. He will be pointing out that he has new management lined up who are highly respectable and have a proven track record (Blin, Murray) and who will bring the club back on an even keel and start making money. He will be admitting to them that there will need to be a cash call in return for more shares but that is the best way to safeguard their investment and get a return in the long run. He may also be hinting that he can line up new cash (King). Remember, it is not unusual to have multiple cash calls in turnaround situations and that, in itself, will not surprise the investors. The key issue here is their confidence in management to bring the club back to profitability and increase the share value. That confidence is what McColl is playing on. I wrote the above in another thread a couple of days ago. Glad to see that Richard Wilson has been paying attention. 0 Quote Link to post Share on other sites More sharing options...
der Berliner 3,310 Posted August 21, 2013 Share Posted August 21, 2013 A decent Analysis by Richard Wilson. ... well, he's hunting semantics and phrases, while reciting what is already known. How many of these analysis' will we have to suffer, you wonder? 0 Quote Link to post Share on other sites More sharing options...
Doc 280 Posted August 21, 2013 Share Posted August 21, 2013 ... well, he's hunting semantics and phrases, while reciting what is already known. How many of these analysis' will we have to suffer, you wonder? Lots I suspect. And most will be less informed than Wilson's. Face it folks we were bought by a bunch of hucksters out to make a quick buck and they will make a quick buck. The question is how much will they make before we see the back of them. 0 Quote Link to post Share on other sites More sharing options...
andy steel 0 Posted August 21, 2013 Share Posted August 21, 2013 You don't have to be a genius to work out some kind of pay off for the shares is needed, though. 0 Quote Link to post Share on other sites More sharing options...
Frankie 8,187 Posted August 21, 2013 Share Posted August 21, 2013 Seems a fair enough analysis. Don't think there's much to disagree on but clearly anything can happen before Friday in the first instance. 0 Quote Link to post Share on other sites More sharing options...
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