A short history of insolvency planning at Sevco

As regular readers will be aware plans have now been put in place for a planned insolvency event at Sevco.

However, such plans have been made before.

In January 2014 and Laxey partners had seen enough under the hood to know that the cost base at Sevco was cripplingly unsustainable.

Consequently, they drew up a detailed plan for an insolvency event that would have lasted no more than 10-12 working days.

However, the Isle of Man based hedge fund couldn’t garner enough support in the Blue Room to action the plan.

I reported this at the time and the then PR advisor to the Blue Room chaps sent out a tetchy statement with CEO Graham Wallace’s name on it.

It told The People to ignore a blog based in Ireland.

Of course, it worked.

So much of the connecting tissue at the Ibrox Volkstaat is formed around hatred of Ireland and the Irish.

It bought the Sevco High Command some time, but not much.

Less than three weeks later insolvency was only avoided by Laxey Partners and the Easdale family coming up with £1.5m in emergency liquidity between them.

It was a vindication of the reporting on this site.

Moreover, it was a very public admission that the millions brought in from the IPO had been spent.

Since then Sevco has limped on with frequent infusions of emergency funding.

The club that was created in the summer of 2012 has never had an overdraft from a bank or a loan from a finance house.

There was no more mention of the “A” word from the Sevco High Command until September 2014.

That was when Philip Nash, then the de facto Chief Financial Officer, realised that administration, as envisaged by Laxey partners, was unavoidable.

The only thing that would prevent such an event would be for some new investment to appear.

That is exactly what happened the following month and it ushered in the brief era of Ashley control.

Big Mike stumped up with £3m of emergency liquidity in October 2014.

Then the following January Sevco was further stabilised by having £10m to draw on in two £5m tranches from Sports Direct.

In the end, only the first portion of the available monies was drawn down.

By that time General Ashley’s two staff officers , Derek Llambias and Barry Leach, were running a very tight operation at Sevco.

I now know that the Ibrox enterprise was within six months of being at a break-even situation.

Of course, events dear boy, events.

The Off Licence Putsch put Mr David Cunningham King in power in March 2015.

The South African based convicted criminal had a clear plan to run the business on Other People’s Money (OPM).

The fans lapped up the gushing coverage from the excited members of the Stenography Corps.

The “spivs” had been routed and “Real Rangers men” were in charge.

Of course, the hacks were not well disposed to follow follow the money.

The fans were drunk on the idea of the glory days returning to Ibrox.

They had been promised that Dave King would lavish his personal fortune on the club.

Except that it was The People who would largely be bankrolling the operation.

However, they grabbed it the way a junkie snatches a fix from the hands of their dealer.

It was the OPM of the masses.

The RIFC year-end accounts for 2017 were only signed off by the auditors because New Oasis Asset Limited (NOAL) promised to meet the substantial cash shortfall.

NOAL is, effectively, Mr King.

By the end of November, NOAL should have provided £2.9m in liquidity.

That money never arrived from the (Quintessentially) British Virgin Islands.

At that point, Mr Alistair Johnston realised that he was dealing with a full-blown liquidity crisis.

Moreover, for the first time since March 2015, the Serious Professional had someone in the Blue Room that he could professionally relate to.

As previously reported here, in the last two months of 2017 Sevco has tried unsuccessfully to acquire invoice financing from four financial institutions who offer that service.

Mr Alistair Johnston then contributed a portion of his own personal net worth to keep the show on the road.

He is the antithesis of King.

He genuinely DOES care about what he sees as his club and it is clear that the events of 2012 had a lasting negative impact on him.

As for the other directors, the main financial contributor within the Blue Room since March 2015 is maxed out.

Any further infusions of emergency liquidity from that source are now permanently Parked.

If the administration button is pushed in the Blue Room it will be done by men who want a football club at Ibrox to survive in some form.

It will not be actioned by a snake oil selling saviour south of the Limpopo who has no fucks to give about The People or their beloved basket of assets.

The insolvency clock is ticking.

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