“Curiouser and curiouser,” said Alice. Despite the apposite nature of the analysis, Alice was not discussing the Rangers/Sevco situation. She could have been as it becomes ever more weird and wonderful. We are either down the rabbit hole or through the looking glass.
STV today revealed that a new newco was the owner of Ibrox and Murray Park. This brought a fevered and nonsensical reaction from the “Rangers” spokesman.
I wonder if Duff and Phelps or Mr Green can explain why the fixed assets were sold to a different company from the one named? What about the binding agreement?
Earlier today, STV reported that ownership of Ibrox and Murray Park had passed to Sevco Scotland Limited.
This appears to have upset Mr Green and his variously named consortia. My comments are in bold.
It is noticeable that the references are now to “the Club” issuing statements. That is even though the website it releases them on is operated by the administrators.
A spokesman for The Rangers Football Club said: “Yet again, ignorant and ill-informed journalism has caused alarm to Rangers supporters.
I think that the copy of How to Win Friends and Influence People which Mr Green has read was a bootleg, with the word “not” added to every sentence. That is the only explanation for the speed with which Mr Green and Sevco seem to be going out of their way to antagonise players, media and Scottish football as a whole. Calling STV ignorant and ill-informed is not calculated to be conciliatory. That is especially so when the story seems to be entirely accurate!
In a survey of “Rangers” supporters, I suspect that the STV story would not be highest amongst things causing them “alarm”.
“For the avoidance of doubt, Ibrox and Murray Park are the property of The Rangers Football Club, which at present is registered as Sevco Scotland Ltd until a name change is given formal approval.
I suspect a legal person is behind this statement. “For the avoidance of doubt” is a phrase used commonly be lawyers, and rarely by normal people. However the legal person’s knowledge seems not to extend very far.
Ibrox and Murray Park are not the property of “The Rangers Football Club”. The Rangers Football Club is not a legal entity. The Rangers Football Club cannot own property. Sevco Scotland Ltd is a legal entity. It, on the documents produced by STV, owns the assets. Sevco Scotland Ltd might, in due course, change is name to The Rangers Football Club Ltd or PLC. But it can’t do so until the existing Rangers Football Club PLC is liquidated.
Therefore the statement made by the “Rangers Football Club” spokesman is wrong.
“Sevco Scotland was formed to ensure that if the formation of a new company was required in the event of a CVA being rejected, then the Club’s corporate entity would be a Scottish registered company as it has always been.
That explanation would be ok, if not for the fact that no one bothered to mention it until the gaffe was blown by Mike Farrell of STV! Why did Mr Green not tell his supporters that he was doing this, and thus save them this alarm?
“It is as straightforward as that and this kind of reporting is further evidence of ill-informed journalists seeing shadows where there are none.”
I must apologise to the spokesman, but that is rubbish. People are seeing shadows because, apart from Mr Green, almost his entire organisation is in shadow, and after all that “Rangers” endured over the last year everyone, either with feelings for them or against them, will see shadows. On past form there may well still be unpleasant things lurking in the shades.
What could possibly cause people to be suspicious and indeed alarmed?
Let’s have a look at the CVA Proposal. Some extracts are below.
4.17 Following the extensive marketing of the Company and the extensive sale process, an offer was made by Sevco 5088 Limited (Sevco) to make a loan on certain terms (explained below) in conjunction with the purchase by Sevco of the Group Shares.
4.19 Consequently, on 12 May 2012, the Joint Administrators agreed and signed an offer letter with Sevco (the Offer Letter) and granted Sevco exclusivity to complete a takeover of the Company or a purchase of the Company‘s business and assets by 30 July 2012. Sevco made a payment of £200,000 to the Company for such exclusivity.
4.23 In the event that either this CVA is not approved, or the other Conditions of the loan are not satisfied or waived by 23 July 2012, Sevco is contractually obliged to purchase the business and assets of the Company for £5,500,000 by 30 July 2012. All further terms of that sale have been agreed in advance and are confidential.
That is clear then. D&P on behalf of Rangers had a contractual and binding agreement to sell the business and assets of Rangers to Sevco 5088 Ltd if the CVA failed.
On 18th May the Rangers website stated “CHARLES GREEN has revealed two of the names involved in the Sevco consortium taking over Rangers”.
On the same date, he was quoted saying “The contract was signed by Craig Whyte and witnessed by the lawyers and advisors. That contract between Craig Whyte and Sevco, the bid vehicle, is binding. The only way that the contract will terminate is in the event of the CVA not being approved. Mr Whyte’s transfer of shares to Sevco is conditional upon that but otherwise it is irrevocable.“
The CVA Proposal regarding the shares stated as follows:-
“4.22.4 Sevco acquiring the Group Shares (Sevco holds an irrevocable written undertaking from Group to sell the Group Shares to Sevco for £1, conditional upon approval by the creditors and members of the Company of a CVA);”
As we have seen Sevco = Sevco 5088 Ltd.
At the creditors’ meeting when the CVA was rejected, STV reported as follows:-
Charles Green, the club’s prospective owner, also told the meeting his newco entity, currently called Sevco 5088 Ltd, would be renamed The Rangers Football Club, which would be the club’s new trading name because of the death of Rangers Football Club plc.
Clark reiterated that Green’s group will definitely take control and there is no scope for a higher bid at this stage to be accepted. He added: “That is a done deal, it’s a contractual arrangement. We had a two-stage arrangement with Charles Green and, if for whatever reason, the CVA could not be concluded then the sale of the business assets agreement would be concluded, so it is a done deal.”
“As we have stated previously, there is a binding contract between ourselves as administrators and Charles Green, who is leading a consortium to acquire the Club. The creditors’ and shareholders’ meetings will take place at Ibrox on Thursday but the results of those meetings will now be entirely academic given HMRC’s decision.
“As soon as the CVA proposal is formally rejected, Mr Green’s consortium will move towards completion of an acquisition of the business and assets of The Rangers Football Club plc. That transaction will be completed within a few days.”
“As a result of that decision, which was known in advance of today’s meeting, the consortium led by Charles Green is obliged to buy the club’s business and assets and that transaction will be completed imminently.”
Prior to the meting Mr Green said the following:- “Now that we will have to complete the purchase via the formation of a NewCo, the purchase price and therefore the amount available to creditors will be £5.5 million.”
On 17th June the Rangers website reported “The Sevco consortium headed by Charles Green completed the purchase of the club and its assets last week when HMRC refused to support an exit from administration through CVA.”
There was however a strange note in the report on the Creditors’ meeting. It stated:-
2.1 The following were present at the meetings of creditors:
- Paul Clark of Duff & Phelps Ltd. – Chairman and Joint Administrator
- David Whitehouse of Duff & Phelps Ltd. – Joint Administrator
- Charles Green – Sevco Scotland Limited
What was this Sevco Scotland Ltd?
In any event all the discussion was about the sale to Sevco 5088 Ltd.
There was some speculation that Sevco 5088 Ltd might have transferred the title of the fixed assets to Sevco Scotland Ltd, However the STV documents, shown below, make it clear that the disposition, or deed transferring title, was granted by Rangers Football Club PLC in favour of Sevco Scotland Ltd.
This suggests to me that the administrators, whilst stating that they had a binding agreement to sell the business and assets to “the Green consortium” and which was made clear to be Sevco 5088 Ltd agreed to sell the fixed assets, which form the vast bulk of the £5.5 million purchase price, to Sevco Scotland Ltd.
I do not see how this tallies up with the statement that there was a binding agreement. Or of there was, it was a binding agreement to sell the assets to two different companies, although not stated in the CVA Proposal.
Maybe someone will ask D+P or Mr Green, or the grumpy spokesman, when Sevco Scotland Ltd came on the scene. Maybe Sevco 5088 Ltd will sue for breach of contract!
There is speculation about close links between Mr Green and D+P via the “Manchester Connection”.
With the greatest of respect to the spokesman, no wonder people see shadows, when the administrators have sold the assets to a company not mentioned in the CVA proposal, nor indeed at the creditors’ meeting.
I will write soon about what the point of splitting the assets is, and where the asset sale leaves Sevco.
Posted by Paul McConville