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Big Rangers Administration/Liquidation Thread - All chat here!


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So if T*ms is just a Celtic term, why is it banned on this site? It is an insult widely used by Sevconians to insult Celtic fans and to talk of "Blue T*ms" is to treat fellow Sevco fans like lepers.

An open post to any celtic fans, does the T word offend you lot?

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serious question, was debating this with folk last night, lets say RIFC fails to rake in the maximum uptake of money( 4m) they say they need ..what is the next step to all this becoming an insolvencey event .. and is a creditor needed to trigger this off (eg -hector , newsagent , shredding co etc) by some sort of claim/ winding up order ..or is it up to the accountents to say " your business model is a total f**k up , were outta this shit " ...i can see this scenario coming to the S.F.A very soon as i doubt even people with money will keep chucking £££ into a black hole ..oh , and if Neil Patey is reading this , you can F**k Aff :thumsup2

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http://www.thefootballlife.co.uk/

Rangers: The Raging Climax

All the way back in 2013, this blog was the first to say that the failure of Rangers to have passed Disapplication of pre-emption rights at their AGM would hurt the club.

That weakness sewn into the clubs make up has grown into a fissure bubbling into the surface and has now erupted into life as the final blow.

It is hard to ever predict something being the final blow to Rangers, such is their tendency to always find a new depth that can be hit, just when you think theyve finally hit the deck. To get into why this is surely the last blow, you have to talk numbers. But you also have to know how it came to this and to know exactly why all this can be boiled down to the voting of one resolution at their AGM.

For those who dont know what disapplication of pre-emption rights is, it is a very standard resolution that controls how share issues are done. In short, it means that when a share issue is done, it is automatically available to everyone. If it is not passed, then it means existing shareholders have pre-emption rights or, in short, they have dibs. If you have a share issue, then the shares must be offered to the shareholders first and not to the public.

This might sound like a small distinction to make, but in financial terms, its a massive one. Ignoring the fact that it means that the share issue is to a far smaller pool of potential purchasers, meaning any share issue has to be smaller than the company would want, the effect is far more subtle than that. If a company wants to issue 10 new shares, but the existing shareholders only take up nine, then that one share can be passed on to the market publicly. But if you, the public buyer, see that share for purchase in the knowledge that the companys own shareholders will not buy those shares, you would be disincentivised from buying that share. This means that a share issue of this type more or less has to be fully subscribed as, if not, it would wreck the share price as a whole. If we take share prices not as a measure of value, but a barometer of confidence (which is really what they are), if that confidence is shot, then the share price must plummet.

Rangers, in 18 months, have lost over two thirds of their value. The barometer is already not looking good. If their own shareholders refuse to back this, the barometer will be as bad as it can be.

You may then think that thats all well and good, theres plenty of companies out there, his isnt unprecedented. But it is. By 2011, all but one AIM company had proposed and passed this at their respective AGMs. Share issues simply do not happen without this resolution being passed. That is how desirable Disapplication of pre-emption rights resolutions are - they have existed in finance for under a decade and they are already industry standard.

This has a knock on effect. No-one is underwriting this share issue. This, also, is rare. Underwriters basically guarantee that a certain amount will be raised from a share issue and get paid a handsome fee for taking this risk onto their portfolio. Rangers, in asking for £4m, are not asking for a particularly large amount, but they have still been unable to find someone willing to accept this risk (or at least, for a tolerable fee). This is driven by the fact that this sort of issue (to shareholders only) is pretty unique and, while Rangers may raise that money, the fact is that no sensible institution is going to stick their neck out on the line for Rangers when they could be landed with shares which are, at this stage, more or less junk.

It is therefore possible to dismiss this entire share issue as a failure before you even look at what the club are asking for. You have a company who are asking for an amount of money from a reduced pool of potential investors in a type of share issue that is extremely rare while no-one is willing to underwrite the share issue. How can that be anything other than a failure? More importantly, that it is being ploughed on with begs the question, just how desperate are they for £4 million? And the higher the magnitude of that desperation, the more likely it is to fail because, at the end of the day, investors are not stupid.

But to answer that second question, you finally do have to look at the numbers.

Rangers aim to raise £3.97m from this issue. Shares will be issued at 20p a share (5.5p lower than opening bell today, 4.75p lower than closing bell). The whole process will be complete by the 18th September 2014 (independence referendum day). After costs, Rangers will have earned £3.6 million if this is fully subscribed,

But why now?

Rangers have loans worth £1.5m due on 1st September. In the bank right now, Rangers have £4.25 million. £2.72 million of this is locked in Rangers Retail and is not accessible. What this means is that Rangers essentially have £1.53m working capital now. As of 2nd September, they have £30,000 left. By their own admission, if their target is not reached, the club will not have enough money to reach the end of the year (this is important). If the take up is under three-quarters of available shares, monies will be returned and the issue will be over without having raised a penny. At this point, Rangers would be unable to pay wages or bills.

How close Rangers get to this target is the big factor. If it is met in full, the club will have enough in their pocket to get to and through the AGM, float the vote on disapplication of pre-emption rights once more, force it through if possible and have a new open share issue with the explicit aim of earning somewhere in the region of £20 million. That share issue would likely be fairly successful (as take up of the existing offer would drive confidence and demand) and the club would have enough to carry itself through until the end of season 2015-16 where, presumably, the idea is that they would be in Europe and benefitting from a massive jump in media revenues. Blood letting would be needed now, but it would give the board breathing room in which to restructure the company into an actual functioning business.

Just missing the target will have similar implications - they get to the AGM, try the vote, have a new open issue which would be far less successful (but at least get them deep into 2015) and we have this rigmarole again in 12 months.

Missing the target by some way but exceeding the minimum would be very interesting as it would mean that the club would not have enough to get to the AGM and a swift in and out administration to do away with any remaining onerous contracts, etc would happen to impose a swift austerity on the club while the relative control the board would have would mean it would be a bloodletting exercise only as creditors would (or at least, should) be non-existent. The hope with this is that they would be deep enough into the season where they could do this and still be fairly assured of promotion. It is, essentially, wait and see.

Missing the minimum would be the end. No ifs and no buts this time. Administrators would be in immediately and the family silver would be flogged to satisfy creditors. As of right now, Rangers can only be delaying those they owe money to, so there must be some creditors. This scenario (which is the most likely by far) brings the dates into question. Why? Because this issue is meant to be done and dusted before the next payday. Quite simply, if it fails, then the staff will not get paid but become creditors and have to wait until administrators sort out the mess.

That would be the CVA option. But the mysteries of ownership of the club muddy those waters as well.

In sporting terms, it is potentially a fiasco. If the share issue is anything but fully subscribed, Rangers will be unlikely to be able to fulfil their fixtures. If the players realise that the timing of this is designed to stiff them for their wages, then there is every chance they could take action before it becomes a reality.

And all this because one vote of many didnt go the way they wanted.

18th September is when we will finally know the result.

How fitting it is that the day the implications of that vote finally come to fruition for Rangers, the biggest vote in Scottish history will be on also. The country whose national game they held to ransom may break free.

For Rangers, they can only break down.

^^ good take on the proposed Issue, and why they are fecked.

And the Records front page..

BwPD1isIgAAhBEQ.jpg

Why did this 'Disapplication of pre-emption rights' fail to get passed if it's so vital to the success of a share issue?

Genuine question by the way - I know nothing about this stuff.

On a similarly ignorant theme, why must they wait until Christmas time to stage another AGM? What's preventing them from bringing it forward?

Edited by Monkey Tennis
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I think we should ask Div to assign a financial expert to this thread. Too many questions needing answered.

For example, is administration really going to be an escape route? Assuming they're still losing roughly £1M per month, can they trim their outgoings by that much via admin? I've read that the 'onerous contracts' might survive death, so they're out. I suppose they could get rid of Ally, Jig and a few of the others but that's a drop in the ocean. I suppose it has to be Murray Park.

If the crowds the fall even further (10 point deduction, no stars, no chance of promotion), a vicious downwards spiral then sets in and liquidation looms.

Would a phoenix club/company/team rise from the ashes a second time? They certainly wouldn't realise the same monumental share issue as last time.

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This crisis has the potential to be worse than 2012. Then the authorities had two months to shoehorn the new club into the system. Now they could be attempting to do it in mid-season while giving them the points of the deceased club and allowing the new club to remain in the Championship.

Rumours on Twitter of the authorities being asked to provide the newco with an advance of monies due later in the season.

Edited by AberdeenBud
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Why did this 'Disapplication of pre-emption rights' fail to get passed if it's so vital to the success of a share issue?

Genuine question by the way - I know nothing about this stuff.

On a similarly ignorant theme, why must they wait until Christmas time to stage another AGM? What's preventing them from bringing it forward?

It failed because existing shareholders don't want a company to be able to dilute their holdings. The dis-applicaiton of pre-emption rights allows the company to issue shares to new investors without offering them to existing ones. You are not permitted to do this without the assent of the existing shareholders.

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Quick edit from the Record there. I was so sorry to hear about the recent troubles affecting Richard Attenborough and Robin Williams, very sad. When I have troubles I would like to be composted or maybe shot into space.

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Quick edit from the Record there. I was so sorry to hear about the recent troubles affecting Richard Attenborough and Robin Williams, very sad. When I have troubles I would like to be composted or maybe shot into space.

more toast more toast

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FUK.gifRevealed: Rangers' troubles have cost Celtic £10m a year, reveals Parkhead chief... Daily Record 08:15

FUK.gifRevealed: Rangers' demise has cost Celtic £10m a year, reveals Parkhead chief... Daily Record 07:46

Quick edit from the Record there. I was so sorry to hear about the recent troubles affecting Richard Attenborough and Robin Williams, very sad. When I have troubles I would like to be composted or maybe shot into space.

Half an hour to pan the windaes in?

The bigoted rent a mob must be slipping.

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It failed because existing shareholders don't want a company to be able to dilute their holdings. The dis-applicaiton of pre-emption rights allows the company to issue shares to new investors without offering them to existing ones. You are not permitted to do this without the assent of the existing shareholders.

That makes sense. Thanks.

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Is this share issue purely aimed at the mugs then or will there be more mysterious institutional investors?

How many shares are you planning on purchasing, no.8?

I am sure i can find a spare pound or two...How many does that get me?

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