Sevcon 2

DEFCON 1 COCKED PISTOL Nuclear war is imminent. Maximum readiness
DEFCON 2 FAST PACE Next step to nuclear war. Armed Forces ready to deploy and engage in less than 6 hours

The fast-paced diminshment of liquidity at Rangers Lite is now at critical levels. Rangers Lite are now at Sevcon 2.

The procedures for pre-pack administration could be initiated at any time. Any announcement would be published after business hours. Traynor is an old hand at burying bad news at 9pm on a Friday evening.

My source has confirmed Phil Macgiollabhain’s information. However he goes further. He is of the belief that the anti-King faction in the beleaguered board are threatening to pull the house down should King not step up with his first tranche of emergency capital. Alastair Johnston and Barry Scott provided short-term loans with the assurance that King would reimburse them. King, at best, is dragging his heels.

The following text is from the RIFC 2017 Accounts:

At the time of preparation, the forecasts identifed that the Group would require a minimum of £4.0m additional funding by the end of season 2017/18 in order to meet its liabilities as they fall due. The first tranche of funding is required in November 2017. Further funding amounting to £3.2m is forecast to be required during the 2018/19 season. However, the final amount is dependent on future football performance and European football participation amongst other factors. The Board have discussed the Club’s forecast cash shortfall and have reached an agreement with New Oasis Asset Limited whereby they will provide additional loan facilities as necessary to meet the above requirements. Further to this, New Oasis Asset Limited and certain investors have agreed to extend their existing loan facilities to July 2019. The Board is satisfied that those parties will continue to provide financial support to the Group and have satisfied themselves as to the validity of the undertakings.

The Board acknowledge that had these assurances not been secured then a material uncertainty would exist which may cast doubt over the Groups’ ability to continue as a going concern and therefore its ability to realise its assets and discharge its liabilities in the normal course of business.”

The material uncertainty is severe. Directors who knowingly trade whilst insolvent are at best suspended for 15 years, at worst imprisoned. This is where the beleaguered board now stand.

King, unsurprisingly, is not keen to venture any capital at this time. One of his counsel’s unsuccessful arguments at the Court Of Session was that King was penniless. If he provided £4m in the short term, Bannantyne would throw the book at him when he faces sentence for being in contempt of court.

King is also loath to relinquish his position on the board come hell or high water, including The Cold Shoulder.

My source is of the view that King has until 21 January to resign as Chairman. If he chooses not to step down the board will be forced to push the button.

The North Korea of football clubs may not have the best ICBM, but they are confident that they can take out King’s offices in Denton, while King takes cover in his basement.

With a gun to their heads the board know that pre-pack is preferable to The Cold Shoulder.






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27 thoughts on “Sevcon 2”

  1. JJ
    If I remember from the time Rangers went into Admin, the role of the Administrator is to run the basket of assets until a suitable buyer can be found.
    Seeing as the majority of this board have already “loaned” sevco most of their money, a prepaid would see these unsecured loans lost, and essentially these directors will have lost their shirts.

    Who therefore will be able to buy the basket of assets, with the reputation of the club/company?

    Are we about to see a football version of the Price is Right?…..Sir Bribe and Lie come on down…

    1. In theory yes, this is one option, the other being the “pre-pack” where the sale of the assets is agreed prior to admin and then executed very soon after appointment. However pre-pack got a bad reputation and amendments have been made relatively recently ( end 2015) to tighten up on these previously somewhat shady agreements and have forced a more open attitude. See for instance and note the issue about connected persons needing to use a “pre-pack pool” to help justify the issue. Also the need to create a plan for how they pan to operate for at least 12 months in some detail.The administrator will need to be pretty squeky clean on this one given the propensity of many involved parties to take to the law courts when things don’t go in their favour.

      My point though which I keep asking, but no one so far seems to have a reply, is who or what group of people are going to plough real money into a pre-pack or CVA to get out of administration. I’ve heard no names or rumours. Admin by itself and the ability to cut costs won’t get RIFC or TRFC out of the funding gap they have. the loans are irrelevant as they are not costing anyone anything at the moment and unless they literally dismiss half the playing staff they can’t make any inroads into ongoing losses.

      Follow the money is always the right move here.

  2. ‘Sevcon 2’

    Sounds like one of those big sad get-togethers for folk who like to dress up as far-fetched characters of fantasy and history. People who like to pretend they are somebody else…..

  3. If I was a Sevco Player I’d be instructing my agent to be getting me out of there this window.

    Better moving to a solvent club rather than accepting 50% wage cuts in the closed season with nontransfer possibility.

    1. I would be staying any hoping admin kicks in ….. Then I could walk for nothing , take a signing on fee from new club and Sevco get nothing 😉


    Every agent in the world has known about the problems for years. Probably even longer than “The Internet Bampots”.

    Why any player would sign for them,why any agent would recommend it,is beyond me.

  5. Output from citizen journalists that genuinely appears to emanate directly from inside Ibrox surely have to be ‘ distress signals’ aimed ultimately at the Rangers support albeit delivered Via the enemy .

    Leaving the King share offer aside It is likely a number of operational scenarios are playing out in what looks like an extremely fraught January

    Plan A : Players need to be sold probably very late in January at knock down prices to save the day and kick the can down the road . This is obviously much better than admin and there will now be relief within the support not riots when it happens and it will be lauded ,and sale values grossly overstated, in the media of course

    Failing that Plan B as you infer is that DK has to do as he committed and indeed provide the funds ,or source them , having been ‘ publicly blackmailed’ into it by the others .That will temporarily make the Rangers fans feel good with messaging of GIRUY Timmy ..We are in great shape. All part of the plan etc until the next crisis !

    Failing that the others on the board either cave in yet again and pony up or the admin button is pressed .
    If the current months scenario is going to recur in February etc with the option of transfer fee income gone and King clearly refusing or increasingly unable to contribute then it’s a no brainer to do it now and avoid further personal liability and legal exposures
    So lining up the ducks for admin with the Insolvency folks in place is a clear and powerful signal as you say to King but also publicly to the support to get minds conditioned also probably to the SFA ( who will know everything already I am sure) to be ready to help.

    What this of course highlights is the scandal of Johnston ,Murray and King all of whom were at the scene of the last crime being allowed anywhere near a football club never mind Rangers .
    I’ve said it repeatedly on this forum . unless and until the influential poisonous Rangers supporting cohort at Hampden (below Regan and Doncaster etc ) is removed then That club in whatever mutation will continue to do what it wants anytime it wants .

    The SFA should be threatening to withdraw the playing license right now until it can see absolute proof of funding at least to the end of the season . Aberdeen Hibs etc should be going nuts and forcing this issue as Rangers have clearly garnered points with players they simply cannot afford .
    Meanwhile of course the media speculate on more January signings probably fed by Kings media poodles and designed to keep fans onside and pressure the other board members to be the ones to pony up if the player sales don’t happen
    And all this with the Cold Shoulder hanging over them like the sword of Damocles
    Defcon stuff indeed!

    My bet ? a player sale and someone ponying up and the caravan keeps trundling down the road with the fans and media exultant!

    1. Not sure if a player ‘fire sale’ of what is widely known as distressed stock will achieve much. At best it would get un-affordable wages off the books.

      Who among the playing staff has any value? Only one other club in Scotland can afford the current wages of players, and that club is in the market for players of a much higher quality. No-one is of interest to EPL clubs so its Championship/First or Second Division who might be the market.

      The Pena affair indicates that even when players are off-loaded, there are likely to be residual contractual costs to the club during loan periods. Premium wages, paid on the basis that TRFC are a ‘major club’, will be a disincentive to players leaving for a lesser quantum.

      Actions on the recruitment front suggest that the penny hasn’t fully dropped. More appear to be coming in on the playing & coaching staff than are leaving. Insanity!

  6. If king steps down as chairman how will that effect the cold shoulder?
    The cold shoulder is to do with his share holding, not his position on the board. If he steps down as chairman he still had to offer to but the remain shares. If they do go into admin I would think most people would bite kings hand off for 20p a share. Leaving him stuck with the basket of assets

  7. When did masons begin ripping off their brothers how low can you get? So all along this pretence about defending fellow brothers and been on the level is a load of shite, now we see it for what it is a pile of shite full of untrustworthy self fufilling bullshitters. When CW was accused of filling his pockets the hard core gulibillies were not informed the silverware was long gone. They the fans have been living off lies and tales from dodgy daves handbhook.
    All coming home to roost, Halloween,Chugg,Graham,Novo,Gough,Brown,Rae,BBC
    Wee (Charlie) Nacho Novo heart attack at his age wonder what caused this in his lifestyle.

    1. Mr Nachos heart attack is not a stand alone event many famous athletes have had heart scares of various types at his age… maybe there is something harmfull to health in too much keep fittery…??

  8. If the anti-King faction forces administration, will this not mean that those who have been lending the money to keep the business – just about – afloat, will lose a big chunk of their money ?

    Also, I assume that new administrators (Duff and Duffer ?) would be appointed. Would the anti-King faction not face the possibility that a new group/individual might appear hoping to profit from what is left of the carcass ?

    1. The loan money was lost as soon as they handed it over. Administration may actually give them more chance of getting some back than before but all shareholding value would probably be lost.

      Some new owners may well appear but they’re keeping a pretty low profile at the moment….

  9. I don’t think anyone should fall for the idea that there is some sort of antagonism between DK and the rest of the board. If there is high level spin going around, that is it.

    Think about the pattern here:

    Whyte is bad, look what he did, but now he has gone and all is well under the sun. Fast forward a few months; Green is bad, look what he did, but now he has gone and all is well under the sun.

    Rinse and repeat; Mike is bad, look what he done, but now he has gone and all is well under the sun.

    And, now, DK is bad, look what he has done (or not done), once he goes everything will be right and well under the sun.

    These stories are necessary in bums-on-seats terms. It’s basically an abusive relationship:

    “I’ve changed, darling, I promise I have. Everything will be great again, just like before… now where is your purse?”

    The story as explained above in the article doesn’t even hold water. Are we to believe the board want DK to resign or fork out so many millions? Or, even more far-fetched, both?

    If King goes, it suits him to go. And it probably does suit him to go. The Court ruled that he had to buy back the shares, not the company as such.

    What matters is sales, remember, everything else is basically showbiz. If there are people who want to enjoy them suffer, then they should pray that the pattern I have explained above continues. It really is a fate worse than death.

    1. Said Epimetheus (brother of Promethus) to Pandora: ‘…where is your purse?’
      Said Aragorn: ‘There is always hope’
      Said Gandalf: ‘There never was much hope…Just a fool’s hope’.

    2. The trouble is we hear this every month and every month rangers survive. What is interesting is that the trumpets also struggle as the SFM have the begging bowl out for February, when it is still January … speak about soft loans and early season tickets anyone. This is the problem neither appear to be able to survive without the other for example where will rangers haters like the strange hearts fans, the idiot Homunculus and John Clark spout their poison when rangers are gone … perhaps Big Pink will find another business that creams in their mindless donations.

  10. Can dodgy Dave just up and leave though without any implications from the auditors and his guarantees to them.

    If the bus is crashed do the takeover panel have more ammunition against him and concert party as they killed a company who were doing OK (comparatively speaking).

    I don’t think he can ride out the Takeovers storm in the hope it goes away.

    He certainly won’t invest any more into the sevco blackhole unless he can get that investment from others.

    Personally I believe the board are presently weighing up their options hence no official statement as yet. Who is likely to do a Craigie on the front steps and deliver the news to the wee bit miffed sevconuts?

  11. I would truly love for Admin to happen to Sevco. It would be interesting to see/read how L5 spin it into a positive, with the gullibillies no doubt sucking it up as usual. If it does indeed happen it would surely put real pressure on the SPFL/SFA to act accordingly and start applying their own laws. Everyone and their granny knows that Sevco are virtually insolvent, and have been for many months. Veritas makes an extremely valid point above, that Sevco have garnered points using players they essentially cannot afford. Every club in the SPFL should complain to the SPFL/SFA that this cannot continue. It makes a mockery of the game, and shows a complete disregard for financial fair play.

    P.S. Happy new year to you JJ. Please keep up the great work and exclusives in 2018. Donation to follow once Januarys bills are settled!

    Best wishes. TJ

  12. Great work as always JJ.

    It’s becoming clear that Alistair Johnston is the one calling the shots in the Blue Room these days. He has effectively become the lender of last resort, and if the loan he provided was on a short term basis, say a few weeks or months, he has the ability to push the insolvency button all by himself when that loan comes due. Given that he knew the state of finances before he made that loan, one can surmise that he had an exit plan on how he was going to get his capital back, with or without interest.

    Also, I’d like to clarify a misconception. While RIFC is facing a liquidity crisis that threatens to push them into administration, they are a long ways from insolvency. There’s a huge distinction between the two.

    The liquidity event is simply running out of cash to pay bills as they come due.

    Insolvency is a technical matter where the liabilities of the firm exceed the asset values and creditors would lose principal in the event of liquidation (see Rangers 1872 for exhibit A). Murray Park and Ibrox are worth a considerable sum and would easily clear any claims against the holding company should the basket of assets be liquidated. As a finance professional, there is zero doubt in my mind that RIFC is solvent today and into the foreseeable future.

  13. There’s one thing I don’t fully understand yet, and perhaps that’s because the RIFC board doesn’t fully know either.

    In the event that they file administration and do a prepack, that still doesn’t solve one of the two underlying problems: the lack of cash in the bank to pay their bills.

    A prepackaged Administration would allow them to rip up existing contracts that are onerous (Carlos Peña *cough*), but there are still past due invoices to be paid. Even if they’re successful in lowering their go-forward cash burn rate to a break even position, they still need a certain amount of cash in the bank for daily operations. They have none.

    They still need someone to step forward to provide a short term cash injection into the company in order to effectively exit administration and avoid the process dragging out through vendor claims.

    If they’re going to push out DK, they will need someone else to stump up some cash. Has anyone volunteered? If not, this administration event could cascade into a liquidation event…

  14. A great piece. With regard to GTG above, there is no one waiting in the wings to ‘rescue’ this club. This is a highly unattractive date when looking for a long term romance. Even a short term romance poses problems. The club (old and new) has had a quarter of a century of fiscal negligence and SDM created an appalling culture which sticks to the fabric to this day. I know of no one of quality who would touch this toxic stock. The club is being badly run by poor quality folks who are failing in their fiduciary duties. It would seem that wearing the blazer and the tie takes precedence over corporate governance.

    This is a hugely unattractive stock.

    SDM had the club on the market for ten long years before CW appeared. No one took the bait.

    Indeed, when I predicted the demise of the club ten years ago, I was laughed out of court. But I called it right. And then, six months prior to CW appearing, I received a call asking if I would be interested in ‘buying’ the club. Now then, dear reader, I do cherish anonymity and buying a Scottish club was not on my list of groceries that week. BUT I did, cheekily, add, that if SDM wrote me a (non bouncing) cheque for £10m AND took the debt away, well, I would take it off his hands.

    I was told to put it in writing and it would be mine within the month. Now, I was playing a line in utter jest. But SDM was desperate.

    No one of substance will go near this club. The future is uncertain and the only guy with deep pockets walked out of the building. Mike Ashley was an opportunity missed.

    1. TM. I always look forward to your comments which are top drawer and and add something very special.

      So if there is no one waiting to lose their accumulated wealth how does administration really help anything?

  15. I find this whole affair depressing. It really is a scandal the way these directors and owners have behaved, both historically (as in Murray’s time) and more recently with Whyte, Green, King et al. I was a season ticket holder of the original club (yes I am one of the minority who does acknowledge it’s a new club) until 2009 when I started working in Edinburgh and have been to one game at Ibrox since then against the mighty Cowdenbeath (it was my birthday and my son took me after plying me with four pints in the Lismore!). I really do wish they had padlocked the gates at Ibrox in 2012 and called it a day. How do the directors/owners get away with this and are still bringing people in (presumably on decent money?) like Vignol, Murphy etc etc when they are about to go down the plug hole? Scandalous and extremely sad.

  16. Sevco did not have enough money to buy any players. That’s been proven. When the company appoints an administrator that will suck the last $500,000 out of the accounts. That money is payable up front. The ostrich like behaviour of the Sevco fans is incredible. They seem oblivious to the fact that their club is in its final hours. There are no overdraft facilities. Creditors are baying to be paid. Warburton and Pedro’s lawyers have a good claim. When the money is gone so is Sevco. It is that simple.

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