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