Mr Green’s Plans and Why The Share Issue is not Needed

Some more thoughts on Rangers official statements re flotation.

My comments are in bold.


CHARLES GREEN insists Rangers aren’t reliant on a successful share issue to achieve their long-term ambitions. The Light Blues chief executive admits it would allow the 54-times Scottish champions to achieve things quicker but maintains they aren’t depending on the cash they hope to generate. They hope that will allow them to raise working capital amounting up to as much as £20million.

So the share issue is not needed now, but only to accelerate the process? It is “Working capital” now. Is this for infrastructure improvements, player purchases or what?

Supporters will have an opportunity to invest and Green has helped the club go into the proposed floatation in a healthy financial position. He believes that will only make the Ibrox outfit stronger and that the cash will assist them further rather than simply keep it on its feet.

Green said: “Let’s be honest about it, the reality is that this year was always going to be a challenge. The minute we were put into the Third Division, in my position as CEO I should probably have made 20 to 25 per cent of the staff redundant.

The time for laying staff off was when the administrators took over, or when Sevco bought the club. Making employees redundant when the SFL3 decision was made would not have saved Sevco any money, as the bill would have been their under TUPE.

One must compliment Mr Green on his efforts not to have jobs lost, even where financially justified.

However, how would institutional investors feel about there being a CEO who is not motivated primarily by the balance sheet?

“We didn’t and as a board and an investment team we wanted to keep the management team intact. We’ve got fantastic staff and fantastic loyalty along with great knowledge and skillsets.

“If you believe, as we do, that Rangers over the next couple of years will go back into the top flights of football in Scotland and Europe, it’s important we keep that team around us.

Back in the top flight in Scotland in a couple of years – there are three promotions needed. Back in the top flight in Europe – pull the other one Charlie!

“I suppose this year, financially speaking, is a difficult year for us. It’s a start-up year and we’ve got lots of exceptional costs.

A start up year? As RTC pointed out on Twitter, a start up for a club with 140 years of history!

“But the model we have – and you’ll see that when the documentation comes out – shows that Rangers, even in the Third Division, can generate profit and is sustainable.

The figures will be very interesting! If he can run SFL3 Rangers at a profit, he deserves every praise coming to him.

“The reality is this money isn’t required to keep Rangers afloat as we’ve taken merchandise back in house, we’re looking for more sponsorship and maybe naming rights for the stadium. These are all things I’ve spoken about before and they will secure Rangers’ future. Because we’re developing things such as Edmiston House, we’ll get better revenues.

How much does the merchandise make? How much extra sponsorship over what they had in the SPL? Naming rights? Edmiston House? All these and wage reductions = profit? Brilliant

“We’re trying to work with Glasgow City Council and the housing association to try to reignite the property development outwith the stadium.

How long will that take – planning etc? Maybe GHA will hit it off better with Mr Green than with Mr Whyte, who is rumoured to have had a meeting with the GHA aborted when he arrived accompanied by a prominent, but officially unconnected Glasgow businessman.

“There are lots of things we have on the table that will make sure Rangers can generate income and will be self-sustaining. This fund-raising will just make it happen much quicker. I couldn’t see that Rangers would ever have a future like they have now. We have cash in the bank ahead of this fund-raising and we are completely debt-free with no borrowings.

Completely debt free as a result of the administration process. However, the implication is that there is no facility available to it either. In fact, would a facility from a lender negate the need for the flotation at all?

A cynic would say that bank funding rather than a share issue would make it harder to pay out any initial investors. Luckily there is no one cynical around here.

“This will only make our position much more secure and we will be able to generate higher revenues and higher incomes to build something really sustainable for the future.”

Higher revenues, AND higher incomes? Is revenue not the same as income? I am clearly not attuned to these matters of high finance.


Posted by Paul McConville


Filed under Charles Green, Rangers

24 responses to “Mr Green’s Plans and Why The Share Issue is not Needed

  1. Michael

    (Net) income is revenue minus expenses. I think Chuck is a wee bit lazy when spelling out his vision. That laziness is probably deliberate.

  2. AB

    “Higher revenues, AND higher incomes? Is revenue not the same as income? I am clearly not attuned to these matters of high finance.”

    Oh please, Paul, are you not above this?

    Rangers fans want to buy a stake in the club.

    There were 26’000 small stake shareholders in the oldco, do you not think some of those will not want to make the same emotional investment in the new company?

    It seems makes a huge amount more sense to allow fans to come in now, when presumably the share price will be at its lowest compared with a few seasons/promotions down the line?

    More fundamentally, who knows how much of the gloss will have worn of this rebirth for Rangers in 6 months-12 months time.

    • ecojon

      @ AB

      How football shareprices will perform in future requires mystic meg to provide any clues. They can go down or up but almost invariably with British clubs, across all exchanges, they drop in value.

      Will that stop a Rangers supporter buying them – I very much doubt it as it is done on an emotional level as opposed to the more clinical approach adopted by a savvy investor or institution.

      Will it stop a previous Rangers shareholder or debenture holder buying the new shares – I think it will stop some.

      Will Rangers share prices only be affected by football success/promotion – No there are a number of major factors which affect shareprice other than football success/promotion.

      One such factor is the number of additional floats and new shares issued going forward. Indeed some of the biggest risk factors in terms of investor confidence have little to do with footballing success.

      On the question of the gloss wearing off – Again a question for mystic meg. However if it does that would tend to lead to a falling share price.

      • ecojon

        I should point out that on a lot of Rangers websites and fan forums sections of the Ibrox support question the timing of the flotation which they perceive to be hurried. They also seem confused as to its necessity and chico being the salesman he is has picked up on that and has now injected the line – it will make the good things happen all the quicker.

        I reckon that even if the float raises £20 million that at least £5 million will be eaten up immediately on chico’s commission and flotation expenses and bits and pieces. Another £4 million at an absolute minimum will be eaten up with the bar, club and railway station.

        So that leaves £11 million to buy new players after January 2014 and to provide working capital for the next 18 months. Even if no other capital projects are undertaken it leads me to conclude that there will need to be other flotations along the way if the grand plans are to be achieved.

        The problem is at the moment it is all pie in the sky and I haven’t seen one project where there’s even a suggestion that a properly costed business plan has been worked-up.

        And then the big ‘IF’ – the original investors are they locked in – some say they are against their will – or can they sell their 22 million shares on flotation. This isn’t a 22 million share flotation it is a 44 million share flotation and every single commentator seems not to realise that or has chosen to ignore it as it raises difficult questions IMHO.

  3. Kikinthenakas

    Charles Green = Tam Pepper

  4. John Burns

    I say, leave it to the ‘herd’ – let them fall for ‘it’ again – a la Craig Whyte.

    “There are none so blind as those who will not see” – let’s encourage, not criticise, all these blindfolded, Sevco/The Rangers, supporters and, apologists in the media, to “carry on regardless”,

    Sevco/The Rangers are in the bottom tier of Scottish football, and any damage that they do, from now on, will impact only on themselves and that division of the SFL.

    When the whole fiasco started, it was thought by many that the Rangers brand was too big to fail – well it has been proved that this not the case, and to paraphrase the words of Neil Doncaster – we are not missing them.

    The initial frenzy and curious interest surrounding Sevco/The Rangers, will soon subside, except maybe in the Daily Ranger and in the Sun until……..yes you’ve guessed it – they go ‘belly-up’ again.

  5. mick

    great read agian paul if hes struggleing money wise and said buy or die the sevconians would sell there house to save them why all the lies ,this to me makes it dodgey some were along the lines the deeds have still never been shown and we have whyte and ticketus also can you float a company with out being liquidated we all no hes a clever con man the money in does not match money out this means a sell off to keep the club going also he has the backers to pay so its all moonbeams just like murray in the past ,its lie after lie ,we have had 9 players from newcastle mike ashley investing millions euro super leagues the mans a desperate deluded fantasised trying to line his own pocket and his backers to

    • ecojon

      @ mick

      The 9 players are the ghost squad – they take to the pitch when all the Zombies have been red-carded 🙂

      • mick

        @ecojon its queens park next glasgow darby its going to be tough for sally and his zombie band wagon the general feel on most forums is hes up to something due to the quickness of the deal with shares if hes rolling in it and debt free as he says ,a think it will all come out soon can you float a club when its a phonoix and cloned from a dead club still waiting to be liquidated with a undervalue sale hanging over it

  6. ecojon

    Lot of Middle East media outlets trumpeting the Naqvi connection and claiming he invested £2 million into Rangers in June. Obviously this line is being leaked to the outlets involved to try and generate Arab investor money.

    I have no doubt that Naqvi supported the purchase of Rangers assets when it looked as it would remain in the SPL and Europe – worth remembering that he and his wife were both students at the LSE in London and is probably relatively clued up on football.

    He could have had a previous connection with Green on the latter’s many financial dabbles in the Middle East and obviously Panceltica comes to mind – the AIM company which Green was deputy chairman of and went belly-up costing shareholders £55 million.

    Is Naqvi still as enamoured especially as it is rumoured that the initial ‘investors’ couldn’t get their loan back and are having to accept shares in the new company. If Naqvi has invested £2 million that could make him a major shareholder ie 10% of share capital or above which ‘locks’ him in and means he can’t sell them for 12 months if my reading of AIM Regs is correct.

  7. jinky7

    No borrowing? Were the £5.5m funds to buy the assets not a loan? Hence that is borrowed money that requires to be paid back with interest (unless it was an EBT!!

  8. ecojon

    @ jinky7

    Well when is a loan not a loan? When it become a shareholding 🙂

    It seems the original investors money was used to buy the assets or cover the loan to buy them. The investors probably giot secured debentures to cover their backs and share options on a future flotation.

    That is what the 22+ million shares that have already been issued are all about.

  9. They really seem more ridiculous taken separately don’t they Paul?

    Can’t stop laughing at Green saying “Let’s be honest” – yes, let’s be honest Charlie, please. Aw, go on, it really would help us all…

  10. James

    I’m staggered you muppets do not have anything better to do. Rangers has £100m of property assets (revalued down to £40m by Deloittes as the club is now playing in div 3) and is a UK brand which has the largest following in Scotland and by Scottish ex pats world wide. its drawing bigger crowds than most of the clubs in the UK let alone Celtic. All the cash went into newco RFC by way of equity and all the investors knew that div 3 was a distinct possibility. The £20m is already covered by institutions and a furthermore Rangers season ticket holders have already pledged a further £9m. I’ve watched with great interest Ecojon and Paul run up their X files on Rangers and quite frankly its ill informed clap trap fantasy land drivel.

    It amazes me that no-one on here that understands risk finance or equity finance and then have the audacity to offer jaundiced opinions.

    Arif Naqvi would be more than happy to write out a cheque for £20m to underwrite this IPO but the management want a broad set of institutional investors blended with a decent chunk of fan ownership.

    Rather than type complete obsessed bullshit on here get out there and try doing something entrepreneurial yourselves. Fecking two bit peasant potato eating key board warriors

  11. C’mon Charles – Cash is King! … you know it, we know it and any rapacious market speculators certainly knows it. Your indecent haste to float Sevco smacks of plain gimcrackery. And if I was really suspicious … I would say that the media ‘Black Ops’ department at Ibrox have went to DEFCON 1 and pressured/told the Daily Revisionist into blocking ANY Sevco criticism on the run up to the share issue.

    • ecojon

      @ Follow the money

      That certainly seems to be the case on the financial discussion sites – but these people want shares sold – good, bad or indifferent it doesn’t matter – because in the buying and selling there’s money for the professionals. Not for the wee people but for the spivs who never lose no matter what the market is doing.

      They are always long gone before the crash.

  12. COYBIG

    Charlie says the money isn’t required, because they’ve took merchandising back ‘in house’. Implying that The Rangers are the only people (see what I did there) reaping the benifit.

    Not true. What happened was, the deal with JJB was ripped up when Rangers died. But JJB still held the merchandising rights (i.e. the colour of the strip ect.). So Charlie, or more likely Mike Ashley, had to buy the rights off of JJB. And then, Charlie signed a deal with Sports Direct, for the simple reason that it was front-loaded, and Charlie needs the money, even tho he doesn’t need it. At least that’s what I think he’s been saying this week.

    It would be stupid to think that Sports Direct taking anything less than 49% (It could actually be much more, with Sports Direct owning the company incharge of it all, as Ecojon has pointed out before).

    Then you have to factor in the percentage the kit designer, currently Umbro but supposedly going to be Adidas, or Diadora, or Puma, or Warrior, depending on what mood Charlie’s in), will agree to take from any deal.

    So, the question is, how far ‘in house’ is the deal? Or is it really just looking in throught the window?

  13. It looks to me that we are reaching a tipping point. First an article in The Scotsman, say, effectively what people have been saying on this site. (Ecojon – it looks like you were right). No defence that I have seen of the Sevco position on this site nor on The Scotsman site.

    Now, I’m not an accountant, no, wait a minute, I am and I am having trouble with some of the figures. Please correct me where I go wrong:

    First some 22m shares are issued at 50p = £11m
    36000 season tickets at £400 each = £14.4m
    Now 22m shares at £1 = 22m

    Total £47.4m

    Debt (the purchase price) £5.5m
    Wages £6m
    Railway station etc £5m
    Other costs rates, other wages etc ? £6m
    IP0 costs ?£3m (based on 50% of D&P)

    If we assume that over the next 3 years Sevco will break even, that leaves £22m for working capital over the next 3 years and for the purchase of new players to triumph in Europe. (No triumph: no 500m watching streamed games).
    If we assume that WC consumes half of that i.e. it is used to finance expansion as your AIMs investor will wish, that leaves around £10m to build the Europe winning team. Or will Ian Black and Co. do that. Now if anything goes wrong e.g the IPO brings in only £11m then Oh Dear!

    As I say, I would be pleased to receive corrections and the other costs can be derived from old Rangers accounts, but I don’t have them.

    • It’s certainly nowehere near that for season ticket income – I believe the number I have seen bandied around was 250quid for a season tkt. That’d be 9m season tix money not 14.4m. You would of course get matchday money, don’t forget the pies etc, but you can quickly see that without this cash injection, there is a hole in the business plan you could drive a tennessee tow-truck through…

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s