There is fevered speculation in social media that RIFC Plc is on the brink and that its beleaguered board have reached out to insolvency practitioners with a view to engaging in a pre-pack administration. My informed readers who have been down this road before with Craig Whyte will know that this is an insolvency procedure in which a company arranges to sell all or some of its assets to a buyer before appointing an administrator to facilitate the sale.
Debts are ring-fenced. Pennies in the pound are offered to creditors. If a Creditor Voluntary Agreement can be achieved the company exits administration debt free. The attraction to a company that is £6m shy of solvency – as per the accounts – is obvious.
Is it time for jelly & ice cream? Another sugar hit after an insulin spiked festive period? Is someone engaging in wishful thinking?
Let’s look at the known knowns. Alastair Johnston and Barry Scott recently stepped up to the plate to keep the lights on at Ibrox until the end of the calendar year. Doubts continue to be cast as to whether Pedro Caixinha or Mark Warburton (whom has just been sacked at Nottingham Forest) have received their contracted severance payments. There are also considerable concerns apropos the monthly quanta required to pay players such as Pena, Alves and Morelos their contracted dues. In plain speak RIFC cannot afford them.
Then there is the three-week hiatus of the winter shutdown to consider. There will be no match day spend until January 24th when Rangers Lite host Aberdeen.
Of significant import is the mendacity of Dave King who promised auditors Campbell Dallas that he would deliver £7.2m to preclude the threat of insolvency. King has not delivered putting the board in a bind.
Furthermore there is my source who has unequivocally stated that George Taylor wants to wash his hands of any company in which City pariah King plays any part. One also knows that Douglas Park is all in and that George Letham has maxed out on his limited credit.
Then there is the shares issue to consider. Why would any director transform his loans into equity and then lose it all when the company folds? Our ursine friends are holding chits for £13.1m. King’s NOAL which provided a loan of £2.8m – despite King’s claims of being pecuniarily disadvantaged in a Court of Session affidavit – would go to the head of the queue as a secured creditor. Our ursine chums who are no slouches when it comes to the dark arts of insolvency might well be minded to get in line.
Then there are reports of a meeting between Alastair Johnston and Stewart Robertson, in the private dining rooms of Hotel Du Vin, with SFA supremo Stewart Regan. A cynic might conclude that they were getting their ducks in a SFA row before pulling the trigger on Administration. Their plaintive cries of “We’ve been duped” would have received a sympathetic and no doubt empathetic hearing by the Ibrox stooge. Should one discount reports that Regan was on the blower to Darryl Broadfoot for advice on how best to ‘frame’ the narrative prior to the cheese board rearing its decidedly whiffy head?
The most compelling reason for a pre-pack administration is to rid RIFC of King and avoid the catastrophic ramifications of The Cold Shoulder. If King won’t budge the directors will have to force his hand.
A successfully executed pre-pack administration will result in a club playing at Ibrox next season. The fifteen points hit may well preclude UEFA participation but this is preferable to The Cold Shoulder which could be terminal.
I will maintain a watching brief. This pre-pack narrative has legs.