The money men hedge their bets at Sevco

There was a time when I thought a Hedge Fund was something that posh people used to keep in jar in the kitchen to pay the gardener with.

Well, apparently I was wrong.

These Hedge Fund people are serious operators and they know all about numbers.

They don’t do emotional investments.

For them it is never personal it is always strictly business.

If they invest in a company it is because they see the possibility for making a profit.

Derek Johnstone on Radio Clyde some weeks ago stated that an investment was “a gift”.

It really isn’t big man.

The Easdale Family are providing £500,000 in liquidity, but it is Laxey Partners who providing the majority of this credit facility.

It is how the £1,000,000 from Laxey Partners is securitised that is the real story here.

For Laxey Partners have rather beautifully cordoned off the only two valuable assets owned by The Rangers Football Club (TRFC was formerly called Sevco Scotland Limited) not threatened by the contingent liability from Sevco 5088.

Edmiston House and the legendary Albion car park are now, in a way, separate from Ibrox and Murray Park.

The stadium that John Brown played for and the monument to Dick Advocaat’s powers of persuasion over Sir David Murray are, of course, subject of a Letter Before Claim by lawyers instructed by Sevco 5088.

£1.5 million is actually £1.35 million as there was an arrangement fee of £150,000.

The action in this still story is in how the Laxey Partners have gone about their business.

15% for six months (30 % APR) is, I am told, a very good rate for the lender.

In comparison Celtic would be borrowing at a rate of 1.55% from the co-operative bank.

The market tells us about perceived risk and the higher the cost of the lending the higher the belief by the lender that the borrower will default.

For Laxey Partners today really is win win.

As the company/club website stated:

“The premium on the Laxey Facility is payable in cash or, at Laxey Partners’ discretion, in ordinary shares of 1p each, at any point between the date of the facility agreement and the first anniversary of the date of the facility agreement.”

That is a telling phrase in the episode of the Sevco saga:

“…at Laxey Partners’ discretion…”

Moreover, I do not believe that £1.5 million is enough working capital to see the operation over the Season Ticket line in May.

For the avoidance of doubt Laxey Partners are the big winners in this today because their loan is securitised against valuable fixed assets and it is down to them how they get paid back.

Anyone who wants to buy into RIFC and secure control of TRFC will have to deal with them and pay them top dollar.

Laxey Partners are now in pole position to be the secured creditors in any future controlled insolvency.

Administration is still the only play that makes any sense in all of this.

Of course this new money from this credit line could be drawn down to pay the February wage bill due this week.

However, it isn’t clear what happens next month when the same sum has to be found all over again.

If this £1.5 million loan was all part of the Grand Plan then I am puzzled as to why it was not factored into the year-end accounts signed off on by Deloittes last December.

It is at times like this I wish I had a tortoise called Alan…

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