The last few days have been a case study in Orwellian stenography.
Sevco’s light blue collar clientele is being regaled with tales of glory by the local media.
This is what they know:
Ashley has been sent packing.
Millions will now roll into the coffers of the club from kit sales.
The reality is rather different.
Mr Ashley made £980k from the sale of his shares in Rangers International Football Club (RIFC).
The sale came after General Ashley received some pressing advice from within his own inner council.
My information is that it was apropos the impending action by the Take Over Panel chaps.
When he decided to accept the Sevco High Command’s unconditional favourable settlement on the merchandise impasse he called a senior employee.
He ordered them to find every single item associated with the Ibrox brand in his warehouses and prepare it for shipping to Glasgow.
For the avoidance of doubt, the products sold at discounted rates in the megastore will not bring a penny into the Holding Company Vehicle.
“Net profits” is the key phrase here.
Moreover, I would not be surprised if the new retail arrangement is with RIFC and not TRFC (formerly Sevco Scotland Limited).
That could turn out to be significant.
Mr Ashley is in the business of making money.
To state that he has had a bad week in his Ibrox dealings is risible.
There has been a seasonality to the cashflow crisis at Ibrox since 2014.
The Easdale/Laxey loan happened in February of that year with £1.5m
Then Big Mike had to step in that October with £3m.
At the victory presser, Mr David CunnighamKing stated that RIFC Directors had to step in this summer with emergency loans.
This summer.
So June is the new October in the Ibrox cash flow calendar.
I understand that one member of te Sevco High Command wrote a cheque for £1.5m.
For the avoidance of doubt that person is not a resident of South Africa.
Emergency loans in June.
This, dear reader, is being presented by the local media as a club that is suddenly rude financial health.
Yes.
Emergency loans in June…
How did Ashley make 980k on his share sale. He initially bought a tranche in the IPO at a higher price either 70p or £1 from memory and then a 2nd tranche at 20p
RIFC shares are now, effectively worthless, selling them for 27.5p was a coup.
Shares are worth what someone will pay and that has obviously happened. However from what Ashley originally paid for them he has lost money on the investment so you cannot say he has made 980k on his share sale when this is not the case.
Ashley bought most of his shares for 1penny as a “contributor” to the Chuckles £5.5m purchase of Old Rangers asset purchase (as one of the early investors pretty the IPO), so he’s actually made a tidy profit on his sale.
Hi Phil I’m not receiving your blogs can you add me please
Will Ashley call in his loans?
He doesn’t have any loans outstanding.
Even if they manage to get the approval to issue new shares they will be limited to howcnany as this will dilute the investment of all other shareholders. Suppose the next stumble could be if the loans are converted into equity will it take one of the “investors” over the 29% threshold and mean an offer to buy all the shares. Whatever way it goes I cannot see any share issue raising any working capital and as they have no bank debt the whole thing would seem to be an exercise in ego massaging.
King has absolutely no one to blame anymore.
Whyte is innocent, although King never had a bad word for Whyte, why is that?
Ashley is out (shares) and the new merchandise contract is King’s agreement.
The only bogey man left, King likes to rag doll, is SDM. Everything now is King’s fault.
Who will be to blame for Sevco this season? Because this squad will never deliver King’s public declared expectations. Fans can only possibly be dissapointed once again.
The good old Sevco blame game.
Can wee Chick please ask Alastair Johnstone the Rangers bust question and see if we can get a nod? I wouldn’t be surprised if AJ is being lined up to replace the serious professional.
£1.5m thrown away with only an expectation of diluted shares returning. That’s a huge amount of net profits from, say, flogging cars. That could buy three £500k seaview penthouses on the Med bringing in £200k a year in rent. I’d be increasing my property portfolio.
Did they need to buy out the old contract (£1m) and pay Ashley’s legal fees (£0.5m) for £1.5m? Plus agreeing a new deal for Ashley and selling last year’s stock?
Just read the absolutely mental remarks by the most popular guy down Govan way after King Billy.
King is clearly pandering to William for his own reasons-to fleece them again but he’s clearly not learned from the going for 55 shite he was spouting about last year. Thats Warburton, Pedro and King making ludicrous remarks regarding the champions of Scotland. Is there something in the water over there? I hope they continue in this way as it’s brilliant. The Celtic board and Brendan must be pishing themselves at Kings remarks. Can anyone of a zombie persuasion who lurks on this site give me a rational explanation of why you can’t see that you’re all being stoated up, again.
In King they trust
It will be interesting to see if they get a new shirt out. If they do it mocks the gullible buying out the old tat, if they don’t they will lose millions. Are they just gonna produce more of the old kit??
They won’t, They can’t.
The 32 Dead deal wasn’t closed in time.
That combined with their lack of business savvy says it all!
But add the Jabba-spin… and it’s all just tactical as there will be new away and 3rd kits (like sec need a third kit) on the way for Ra Peepul.
Any odds on Squinty going for an orange one?
Not to pander to any particular demands mind!
I purchased a copy of the Sunday Mail (yes I know) this morning to read on a train journey and the nonsense which is being peddled by King, the board and the compliant press is simply unbelievable.
All any sceptical Sevconian, who might pop in to read your blog, needs to do it compare and contrast what Chairman King is saying now about retail income with what he has said in the past.
I’m not sure of the date, however, it was not that long ago when he dismissed the £5 to £6 million which could be brought in by a proper retail deal as “no biggie” and an amount which he could cover without a problem.
Now, that same income is a quantum which will turbo charge the TRIFC into the world football big time. To call that risible is an understatement.
I had thought that the talk of the directors putting in money to fund Pedro was a fiction being used to combat any thoughts of the season ticket money coming in one door and going out the other in short order. I’m pleased to learn that I was wrong.
They can maybe now get the required share issue over the line at the next AGM in order to turn what is now around £16 million in directors loans into equity. All well and good, however, what does that mean for the number of shares in circulation and what will the knock on effect to the fans shareholding and their ambition play a bigger part in the running of their club?
Emergency loans….in June. Wow,
well that’s it then ,we didnae win the European cup cos barca wurnae in it.we didnae win the coronation cup cos third Lanark wurnae in it.gullibillies all nod together,thats true so it is.
Soft loans must be approaching £20 million.
If a share issue is in the wind a debt for equity swop will immediately wipe £20m off the sum raised. Add a couple of million for associated costs and expenses and there will be hee haw left over for working capital.
Last but not least existing shareholders face a major dilution of their current share value.
With King facing further action from The Takeove Panel Big Mike has made a profit on his shareholding by getting out now. Some of the other major investors, who paid full whack for their investment, might follow suit if a buyer can be found…….some hope, before the share value dives when King is called to account by the Court Of Session.
King and his concert party have gone All In with an unknown manager who has made Spanish and Portoguese the main language in the dressing room and the dug out. It’s hugely high risk and requires early success when the season kicks off otherwise some of the media may take a closer look at Pedro’s verbal outporings which are mostly gobbledegook yet taken as gospel by the MSM though in reality they are probably creasing themselves behind closed doors.
Surely Jackson’s homage to King and his finest moment article was tongue in cheek ………..
With record ST sales has none of our brave stenographers questioned why a £1.5m further soft loan was required in June, even allowing for the fact that a number of ST sales will include instalments………..where’s Ticketus when you need an immediate cash injection?
With protracted negotiations around the Dorrans, Walker and now McLean transfer fees and the structure of the payments every pound is a prisoner with Abetdeen and Hearts well aware of the cash flow issues at Ibrox.
It’s going to be another bumpy ride!
There is one possibility put out there on another site and that is that with the Directors being the main creditors “Investors can then Invest” and get a percentage of their money back as dividends. So if someone was to say invest £20 million of ill-gotten gains and get £15 million back they may be happy to pay that sort of price… I wonder if that’s been done before!!!
The football authorities didn’t ask questions before but then why would they, maybe they were put in place by the man who first thought it up. Just saying….
If I am reading this right, Sevco are offloading last season’s shirts for 20 pounds a go. These have been bought from Sports Direct for the full retail price of 50 pounds each. But under the new deal, the profit on a shirt is 10 pounds, split 50:50 between Sevco and Sports Direct. So Sevco get 5 pounds back, which goes towards the millions of pounds of debt they have racked up with Sports Direct.
Meanwhile, Sevco has missed the boat for a new shirt this season, so last year’s shirt is also the new season’s shirt – which Sevco have just sold to their fans for 40% of the full retail price, with the remaining 60% being subsidised from directors’ pockets.
Is this really correct?
You’re wrong.At no point did they pay 50 quid per shirt.For the avoidance of doubt the puma website has them retailing at 40 quid.The away shirts are cheaper though.
Phil, can you ask the Rugger guy about the next step, presumably the EGM, disapplication of pre-emptive rights and transfer of directors loans into shares.
King et al will want as low a price as possible to cream as many shares and dilute other holdings but they’ve struck a price of 27.5p which is higher than probably their existing holding. And higher than takeover panel suggested.
Surely Ashleys pfice is the best “market” price and base for any capital raising?
No doubt you will pish yourself when you read Kings latest rant to his bears. This guy is comedy gold even better than charlie. Honestly if this is what sells in newspapers and people buy it i am taking up sports writing for the sevconians this is really easy money. The more intelligent ones think this is a King wind up, really i mean this is supposed to upset or noise up Celtic fans, meanwhile jelly and ice cream is shooting throught he roof, these guys have to stay in charge.
This has been probably one of the most absoloute brilliant moments to be alive and following Celtic who would ever have thought how really fecking dumb their fans are.
If they manage to go down the debt for equity route does that potentially reduce the glib and shameless liar’s concert shareholding to below the TAP’s threshold and, if so, would that get them out of a potential cold shoulder or would it be too little too late?
Debt for Equity is no answer to their financial woes. We could get to a stage in the not too distant future where the sum of the soft loans matches the value of tbe business. A debt for Equity swap in such a scenario means the business will be free of debt but the guys who provided the soft loans will basically have written their money off as the value of the individual shares will become diluted to half of their present value. They will have no debt but they will still be a dysfunctional business needing loans to survive. The whole scenario, business, entity, whatever you want to call is, in the long term, unsustainable.
Me thinks hector will be bumped again then admin and buy back before craigy buoy gets his belongings back watch this space
I hope sevco do not go into administration. I, for one, thoroughly enjoy the circus off the field and the clowns on the field. I want them to stumble along for years. The comedy value is priceless. And the SMSM building them up at every turn being lapped up by the gullibilly’s only for reality to subsequently hit them right in the baws is the best bit.
They will never learn as they don’t have the intellectual capacity to learn. When they left the “soup” all of the building blocks for the development of intelligence were left far behind. I heard this lad proudly boast that he was expecting a delivery from the Rangers megastore.
As my jaw dropped followed by guffaws of laughter,he followed this up ” Dave has achieved everything he said he would.” Swallow, swallowed , swelling.
My daddy who was a miner,R.I.P., used a quote which I believe epitomises them and their lack of culture and intelligence ,”You cannae put brains into a clug son “. ( a clug is a wooden pit prop cut into sections to make kindling)
My daddy was a wise and very intelligent man.
Unfortunate but they will survive. I hate the club, and the guy King is a Wanker of the highest order, he is a parasite. But the knucle draggers think he his some sort of saviour.I thank god i am an outsider looking and laughing in at them, i can see what he is up to, however these imbeciles cant see through him.
So Phil.
These soft loans the directors gave a cheque for 1.5 m a few times what are these people getting in return / or are they writing this money of if it all goes wrong.
Hypothetically Phil, if sevco go into administration then where would that leave Craigy Whyte and his case for the crumbledome and murray park?
No idea.
If I recall correctly it’s a case of “Prior Tempore Potior Jure” – earlier by time, stronger in law. So whoever raises court action first has the strongest right to the assets – subject to any statutory preferential treatment. But that’s in the case of ‘Liquidation’.
Hi Joe, I think you may be confusing Administration up with Liquidation. In the former insolvency event the company is on life support but still has a chance of being saved – if the majority of creditors agree to an offer of being given a small percentage of what they are owed. If they don’t agree, then the company dies = Liquidation. The creditors then join a queue and the assets of the company is divided between them. Some creditors rank above other creditors so some may get all of what they are owed, others get nothing. It’s because the choice is often a wee bit of something versus nothing that companies can exit administration.
PS. Did you got to St Mary’s Primary?
Lmfho this is better than Still Game Only Fools And Horses and Mrs Browns Boys ?????
Administration is coming this season i feel especially if the Pedro experiment goes badly wrong
The main creditors are the directors.
For as long as they want to keep writing cheques then the show will stumble on.
But even they Real Rangers men don’t have the funds of The Bank Of Engarland ..???Administration sooooon
An administration is when creditors can’t get paid and they demand payment.
The main creditors are directors.
So admin is unlikely.
So if they stop putting there cash in and players wages staff wages and suppliers don’t get paid what that called if not Administration ??
You’re making a large assumption that they will simply cease to pay.
Wishful thinking on your part.
A debt for equity swap might happen now if Resolution 11 can get passed.
Agreed. Unless the lying King pisses them off to such an extent that they see no other option. If the first set of audited accounts after this new wonder retail deal show that it’s not worth Jack Shit, the bears could get very angry and the big daddy bears on the Board might just say “FUCK THIS FOR A GAME OF SOLDIERS!!!!” and decide that although King’s grandweans inheritance is safe theirs are not.
But the directors don’t have bottomless pockets – they can’t keep underwriting the operating losses.
Since Rangers (company or club) are losing roughly 10M pa, there must come an end. If they really are putting in emergency loans to lure El Galacticos at this early stage of the season (has it even started yet?), this year has a last-throw-of-the-dice feel about it
Phil does your source have any clue as to whether the emergency loans were to pay the full transfer fees agreed or the “initial up front payments”?
If they went into administration, the directors would be faced with a fraction of the money they have loaned, as all other outstanding payments due would crystalise. So yes, the directors are unlikely to pursue that course of action.
Their only realistic chance of getting their money back is via a debt for equity swap, assuming Rangers can now pass the resolution allowing them to issue more shares. Even then, they will be left with shares that cannot be traded other than on a matched deal basis, so have paper value only as things stand.
Indeed.
A debt for equity swap does seem the most likely outcome now.
The fundamentals of the business remain unsound.
As the cost base is still too high.
Admin is unlikely, okay.
What effect could the impending action for the TAP have on the continued trading of TRIFC/TRFC and the directors?
Gretna operated and survived along the similar sugar daddy funding model. Once the sugar daddy is bored losing money and decides to walk away, the music stops. They don’t need to raise any action of diligence to get their loans back (though they’d be well advised to). Admin will come because, as you agree, the costs of running Rangers are far greater than their revenues. At some point, someone won’t get paid (probably HMRC) and we’re again looking at administration and perhaps a subsequent liquidation.
The directors are between a rock and a hard place. They either keep ponying up the loans that allows Rangers to be somewhat competitive or let the club die. The other option is that Rangers are properly run and can at worst break even. But that means being horsed on the park.
So if the directors decide that they can no longer fund this entity and stop the cash input and the shit hits the fan then they will be the scapegoats for the failure.
Meanwhile in a bunker south of the Limpopo………
Those damn details is where the plagiarist could find the devil………….i won’t hold my breath
What has happened to the season ticket monies Phil?
Some it comes in by instalments.
Consequently, “the pot” currently isn’t big enough to cover the outgoings.
All seems very clear, Phil. Sevco/the “Club”/”Company”/holding “Company” vehicle/old “Club”/new “Club”/new “Company”/new “Entity”/it wasn’t that it was this/no, you don’t understand……blah blah blah, etc. ad infinum are insolvent and trading illegally.
Well played, sir…….the truth will out. None so blind as those who cannot see.
Will they ever learn ? It would appear not…….HH.