Laxey loans club money

[ian1964 10,372]

Rangers set to receive £1.5million cash boost from investors to ease club's financial fears

 

RECORD Sport understands the Ibrox club's chief executive Graham Wallace is in advanced discussions to raise the emergency funds from two prominent investors - the Easdale brothers and hedge fund managers Laxey Partners.

 

RANGERS hope to rake in a £1.5million windfall that should ensure the club is not dragged back into financial distress.

 

Record Sport understands chief executive Graham Wallace is in advanced discussions to raise the cash from two prominent investors – the Easdale brothers and hedge fund managers Laxey Partners.

 

It is anticipated these loans will not be repaid but converted into shares later this year, strengthening the positions of both groups at boardroom level.

 

Sources inside Ibrox remain adamant the club is not on the brink of running out of money any time soon but, despite this, Wallace was in London yesterday on the latest leg of an urgent round of fundraising.

 

And experts in the city expect the CEO to make an announcement to the stock exchange next week, confirming that the Easdales and Laxey have agreed to pump emergency cash into

the club.

 

A city source told Record Sport last night: “The club says it has enough cash in the bank to continue trading at the moment but clearly Wallace sees a need for fresh investment.

 

“In effect, the fact the Easdales and Laxey are prepared to hand over such significant sums is a show of faith in Wallace and the direction he is taking the club.

 

“They are taking a long-term view because the money will not be paid back quickly – it could be as much as a year down the line – and even then it will be paid back in the form of shares.

 

“Nothing has been signed off but a deal is close and there should be an official announcement in the next few days, probably early next week.”

 

The arrangements are expected to be ratified and rubber-stamped at a board meeting scheduled for today.

 

While Rangers insist their financial position is stable, there have been huge concerns about the club’s continued solvency ever since former financial director Brian Stockbridge predicted there would be just £1m left in their account by April this year – despite having raised £22m from an IPO in December 2012. These worries were heightened recently when Wallace floated the idea of asking Ally McCoist’s first-team squad to accept 15 per cent pay cuts.

 

The club have still to put an exact figure on the expected shortfall in funding between now and the end of the season but it’s believed to run into millions.

 

In fact, former director Dave King has expressed his belief the club could be facing a second insolvency event in just two years and has offered to pump some of his own money into Ibrox in return for a position of power in the boardroom.

 

As we revealed on Monday, King was still attempting to engage with the board last Friday – the anniversary of the day former owner Craig Whyte plunged the club into administration.

 

But King’s overtures have been consistently resisted by the current regime. It’s understood James and Sandy Easdale and Laxey boss Colin Kingsnorth are dead against any deal that might see their power base diluted.

 

Other leading shareholders, such as the mysterious Blue Pitch and Margarita Holdings, are also thought to be opposed to King’s involvement.

 

Sandy Easdale has even been credited by some inside Ibrox for helping Wallace to pull this alternative cash injection together.

 

Rangers can also expect a cheque in excess of £1m early in the spring as part of their merchandising deal with Mike Ashley’s Sports Direct.

 

Our city source said: “Obviously the club will be looking to bring in as much cash as it can get in the short to medium term before the season-ticket renewals start to come in later in the year.”

 

http://www.dailyrecord.co.uk/sport/football/football-news/rangers-set-receive-15million-cash-3164353

[chilledbear 16]

I wonder how many supporters will give up their ST, in favour of paying game to game?

[BEARGER 1,829]

I've expanded the picture and the small print says that "Sportsmail understands ... ", so right there it is not yet a done deal. It continues by saying that the Easdales and Laxey Partners are in discussions at the moment. It continues saying that City of London sources say that the loan should be paid back in 12 months by shares rather than cash.

If the story is true, then that should mean about 4-5 million shares ( approx 30p/ share ).

 

Why is it bad that current shareholders invest more money in the club?

 

They get shares at reduced cost. They increase their stranglehold on the club. It dilutes the shares of everyone else.

[JTP 0]

So is this not diluting the shares .......................... i.e. is this not what KIng was knocked back for?

[Darthter 542]

Might just be my basic understanding of how all this works.....

 

ANYONE wanting to invest will want something in return.....If Laxley (or anyone else for that matter..) either want or are requested to input more cash, surely it is only natural that they will want something for it ie shares.

Does anyone believe that someone with £1.5m just kicking around would simply give that cash to RFC out of the goodness of their hearts??? If they are receiving shares in return, fair enough....the key will be @ what price will the shares be calculated at - current price or the price at the time of repayment.

 

The fact that the club apparently need this input of cash is slightly worrying. My recollection of Wallace's comment were that it was the mid to long term future that was ok....

[ian1964 10,372]

Might just be my basic understanding of how all this works.....

 

ANYONE wanting to invest will want something in return.....If Laxley (or anyone else for that matter..) either want or are requested to input more cash, surely it is only natural that they will want something for it ie shares.

Does anyone believe that someone with £1.5m just kicking around would simply give that cash to RFC out of the goodness of their hearts??? If they are receiving shares in return, fair enough....the key will be @ what price will the shares be calculated at - current price or the price at the time of repayment.

 

The fact that the club apparently need this input of cash is slightly worrying. My recollection of Wallace's comment were that it was the mid to long term future that was ok....

 

This is the same with King!, he wants to invest but wants a seat on the board in return!

[Bluedell 5,329]

I've expanded the picture and the small print says that "Sportsmail understands ... ", so right there it is not yet a done deal. It continues by saying that the Easdales and Laxey Partners are in discussions at the moment. It continues saying that City of London sources say that the loan should be paid back in 12 months by shares rather than cash.

If the story is true, then that should mean about 4-5 million shares ( approx 30p/ share ).

 

Why is it bad that current shareholders invest more money in the club?

 

I doubt the shares would be at that price. The share price has been as low as 22p? With a discount in lieu of interest and arrangement fees that could push the share price down to, say, 15p (although with this crowd it could be lower). That could be 10m shares.

 

That means that it dilutes everyone else's shareholding. Let's say the fans had managed to get a holding of 1% through BR and CIC. This would instantly bring their holding down to below 0.87%.

 

I believe that the Easdales main long term objective is to get ctotal control of the club and this is a great way to get shares on the cheap and dilute everyone else's shareholdings will they're at it.

[Frankie 8,114]

I doubt the shares would be at that price. The share price has been as low as 22p? With a discount in lieu of interest and arrangement fees that could push the share price down to, say, 15p (althoiugh with this crowd it could be lower). That could be 10m shares.

 

That means that it dilutes everyone else's shareholding. Let's say the fans had managed to get a holding of 1% through BR and CIC. This would instantly bring their holding down to below 0.87%.

 

I believe that the Easdales main long term objective is to get ctotal control of the club and this is a great way to get shares on the cheap and dilute everyone else's shareholdings will they're at it.

 

Agreed but I think some folk are making the point (a fair one) that King would probably want to do the same thing but, presumably due to familiarity (and fan group backing), it would be seen as more suitable.

 

As always we're lacking in detail so it's difficult to form an accurate conclusion. That uncertainty is a danger ahead of season ticket renewals so hopefully we'll see some proper comment from the CEO very soon.

[Frankie 8,114]

Confirmed to LSE:

 

Statement re. Press Speculation

 

The Board of Rangers notes the press articles this morning and confirms that it is holding discussions with two major shareholders with a view to arranging a loan of up to £1.5m to provide working capital for the Company. Documentation and terms have not been finalised, and a further announcement will be made when appropriate.

[Bluedell 5,329]

Agreed but I think some folk are making the point (a fair one) that King would probably want to do the same thing but, presumably due to familiarity (and fan group backing), it would be seen as more suitable.

 

One main difference between a loan from King and a loan from the Easdales is that the one from King can be negotiated at arms length. This is the directors deciding what they are going to award themselves.

 

If anyone was going to come along and say that they would lend the club £1.5m at say 8% pa and get paid in shares at the day's rate then I don't think it's such a big issue but we will both be surprised if the effective interest rate is not much higher than that with punative arrangement fees thrown in as well.