Betting on Sevco

The problems with unsubstantiated rumours are that some of them might turn out to be true.

Yesterday Planet Fitba was on fire with chatter about Sevco and an imminent insolvency event.

Then betting was suspended on the prospect of the Engine Room Subsidiary being bottom of the SPFL Premiership at the end of this season.

Given that administration would only result in a 15 point penalty that one appeared to be difficult to fathom.

What I DO know is that elements of the Sevco High Command have recently sought quotes from insolvency practitioners.

The Blue Room chaps wanted to know what the cost of an administration would be.

Moreover, the brogue wearing brethren at the top of the Marble Staircase had a price in mind.

That isn’t a rumour it is a strong story, stood up with multiple independent sources.

However, there was one lingering question:

Cui bono?

I tried to address this when I first broke the story.

An administration could have two benefits for the anti-King faction in the Blue Room.

Firstly, an administrator would have the legal power to cut the wage bill at Sevco within the first 14 days of the administration.

Unlike the situation with the original Rangers in 2012, there is no massive queue of external creditors waiting to be paid.

There ARE unpaid suppliers, as I have already reported here.

However, although the total monies are now at least a substantial six-figure sum it isn’t enough to put the basket of assets under.

No, the issue for Sevco in 2018 is liquidity.

A shortage of operating cash.

It is as simple as that.

Secondly, if the pro-administration faction could blame King for the shambles then they would have a way of ejecting him and shredding his reputation with The People.

My scoop about approaching the four insolvency practitioners is fact.

I have the names of the companies that were approached.

The rationale behind some within the Sevco High Command wishing to go down this route is informed speculation on my part and is advertised as such.

Before they tried to price the services of an administrator the anti-King faction also looked for invoice financing.

I took this as an implicit statement that they didn’t believe that the Impecunious Kid south of the Limpopo was going to provide the necessary funds as per the published accounts of RIFC.

Since I broke those stories one thing I have been told from an impeccably placed source is that Alastair Johnston has formed an ad-hoc finance committee at Sevco.

Apart from the USA based businessman, there are two others on this body and I believe that the Serious Professional is one of them.

The unsuccessful attempt to secure invoice financing from four companies providing that service was almost certainly the first move by Johnston’s committee.

The Stateside businessman knows the entire extent of Sevco’s financial predicament.

He has known it since just before the RIFC AGM.

Everything since then makes sense.

He knows that his beloved basket of assets must access external finance in order to survive.

Moreover, they must do so rather sharpish.

If they access external finance then they will be able to continue to operate as a business.

However, there is a corollary to that statement.

Whether or not you choose to go to the bookies with that rationale is totally your choice.

Please Sevco responsibly.