I received this from Rugger Guy this afternoon and I think it is worth sharing.
Good afternoon Phil
In our most recent chat, you brought up the recent financial challenges which continue to haunt RIFC.
You also mentioned the loan taken out in February this year by Close Brothers for £3m and I reminded you that it was worth pursuing this for a more full financial disclosure as the recently published accounts made no reference to these at all.
This seemed strange as it appears that this liability and related finance costs were still outstanding as at 30 June 2018, the financial year-end.
I think that it is worthwhile to do a brief refresh on this:
In the agreement of February 2018 between Close Brothers and RIFC, there was a charge placed on the west side of Broomloan road and Edmonton House. In addition there was a subsequent floating charge raised on the stadium catering equipment, the stadium PA system, stadium wifi system and stadium bowl screens, with collective value on these four assets of £3.2m.
In October 2018, over three months after the year-end, you indicated that Close Brothers called in the loan.
In my analysis of the accounts to 30 June 2018, the only charge or security disclosed was the standard security raised over the Hummel training centre by the Scottish sports council. The accounts were signed off at the end of October, so potentially they may have been repaid shortly before the publication of the accounts.
In essence, the accounts have not shown any other loans apart from directors, investors and related parties.
The charges on assets acquired under a finance lease are listed separately.
Interest charges shown in the accounts are minimal as all the loans were essentially granted on an interest free basis. I am quite certain that the Close Brothers’ loan would have been made on a commercial basis.
Ordinarily, if this loan was not paid off in full before 30 June 2018, I would have expected Campbell Dallas to ensure that the full and correct disclosure would have been made.
The lack of disclosed information on this loan is perplexing indeed.
Well, if he finds it “perplexing” then that’s good enough for me.