And one more – confusion re club and company, and an update, without numbers, about the new share offer.
My comments are in bold.
CHARLES GREEN insists it was crucial to give Rangers fans the opportunity to invest in the club. Around 26,000 supporters had holdings in Rangers under its previous parent firm and lost them when a new company was formed in June.
Crucial to give the fans the opportunity to “invest in the club”. Supporters had shares under “its previous firm”. The shares were lost when a “new company” was formed.
What are the fans and investors being given the chance to invest in?
Will we see the emphasis for fans being on investment in the club, and for institutional investors, on a profit making business? How can that fit into the Prospectus?
It is expected interest in putting money into the Light Blues in return for shares will be high after the club announced its intentions in London today. And while Green understands the difficult financial climate at present means some won’t be able to invest, he knows many will be keen to subscribe.
Roll up, roll up, shouts Mr Barnum!
Speaking exclusively to Rangers TV in the capital, he said: “It’s very important that fans get the chance to invest in their club. You’ll have seen in the last few weeks we have been over to North America and to Ulster as well, where we met fans groups last Thursday. We then met fans in Glasgow on Friday and both went through our presentation and told them what our plans are.
“Of course, the club has tried to raise money (through share floatation) in the past to raise money and sometimes the fans haven’t taken part.
Saying the fans did not take part is a bit like saying that bears are occasionally known for doing their business in the woods! On the other hand, there are 26,000 disappointed shareholders – who all had to have bought their shares at some point.
“But it was very important for us that the 26,000 people who lost their shareholdings when the oldco collapsed were given the chance to reinvest.
How is he giving them a right better than any other people, as seems to be the implication? In addition, it will take a masterpiece of selling to get 26,000 people who lost their entire RFC investments before to invest again?
“We do acknowledge that these are difficult financial times for the whole world, not just for Rangers fans.
“But the reality is we made a promise, we’re sticking by that promise and we think there will be strong support.
“People have seen the turnaround at Rangers, the crowds have been fantastic and we’ve had investors come up to Glasgow.
“We had a number of potential investors there when we played Motherwell and of course the atmosphere was fantastic and the result was great.
I hope there were few at the Stirling Albion match!
“People can see there is value in investing in Rangers and not just because someone might be a Rangers fan.
“I think there is a very, very solid business here now and what has emerged over the last few months is a different model.
“As Brian Stockbridge has got tighter controls, we’ve got a team in place and Imran Ahmad has begun working on the commercial side, things have changed as Rangers have rebuilt.”
So, despite saying that there is priority for Rangers fans, there is value for other investors? So other small investors are acceptable – even if not Rangers fans.
And Mr Green followed this up yesterday with the following:-
CHIEF Executive Charles Green today thanked Rangers supporters for their ‘very encouraging’ early response to the announcement on Thursday by the Club that it is to seek Admission to the AIM market of the London Stock Exchange.
Rangers plan to raise up to £20 million through an Institutional investor placing and limited public offering. The funds raised will be used for strengthening the player squad, improving and developing the Club’s properties and facilities, as well as providing additional working capital. It is anticipated that Admission will become effective before the end of the year.
Charles Green said today: “By close of business last night, Capita, the company handling share registration had received registrations of interest in buying shares which, on completion, would be a very significant step towards us achieving our objective.
“Although these are registrations of interest at this stage, we find this a very encouraging early response, particularly since the registration process had only been operative for 24 hours.
“This is an early indication of interest but I would like to thank fans for the support they have given the process so far and we are pleased that fans have the opportunity to invest in the Club.
“The Club is keen to accommodate as many fans as possible in the process and will welcome continuing supporter interest to help us achieve our objectives.
“I think this shows once again that Rangers are a big Club with a big support. Now we are a debt-free business there is every opportunity for the Club to be run efficiently, effectively and successfully.”
Every time Mr Green goes on about the business being debt-free, two things come to my mind.
First of all, their debt-free status is only as a result of the massive insolvency of the company from which all the assets, including history, were bought. As Mr Green would have it, the club shed its debt as a snake sheds its skin, except there is no dubiety about the snake’s identity after that process.
And secondly, is the business really debt free?
The original plan for the CVA involved investors lending RFC the £8.5 million to see it through. However, as we know, that did not happen and therefore the asset sale took place at £5.5 million.
That was an outright purchase and not a loan. Therefore, whilst investors might have borrowed to put cash into the original investment, that is not a debt due by Sevco.
However, what about the football creditors? Have Dundee United been paid? What about the fee for Lee Wallace? Has the final instalment been paid?
As I wrote before just because the payment is not overdue does not mean that it is not a debt!
And does the agreement (remember, an agreement) by Mr Green to meet the football debt include repayment of prize money, should the Nimmo Smith Commission recommend stripping of titles after a guilty verdict?
Lance Armstrong faces demands to repay millions of dollars of prize money won over the years he has been held by USADA to have run a sophisticated campaign of rule-breaking in cycling.
Should Mr Green’s Rangers be ordered to repay prize funds, then I accept that this is not yet a debt, but it could run to a large sum. How is Mr Green going to react to such a decision? Light the blue touchpaper and retire, I imagine!
In the coming days, I expect to see more PR spin from Ibrox, or should I say more neutral advice from the executives of the company which is about to be floated.
It should be interesting!
Finally, I am glad to see how well the initial expressions of interest have been. I must confess to having registered interest myself, and in error clicked £10,000 as an indication of my intended level of investment. Mind you, if the returns of 400% indicated by Mr Green come to fruition, it might be worth looking for more!
I assume Capita have the technology to weed out all the expressions of interest from “Craig Whyte” residing at “Castle Grant”!
Posted by Paul McConville