Have The Close Brothers Backed The Wrong Horse?

In Shakespeare’s “The Merchant Of Venice” which was written in the late 16th Century (1596-1599), Bassanio requires some cash so that he can woo Portia in style. Antonio suggests that Bassanio borrow money from Shylock,
using Antonio’s good credit as collateral. Shylock agrees to the loan but asks for a pound of Antonio’s flesh as a guarantee. Antonio agrees because he’s completely devoted to his friend.

Fast forward to the early 21st Century and the clusterfuck that is Sevco have written their very own Shakespearean tragedy:

Dave requires some cash so that he can convince The Court of Session that he’s penniless and keep the lights on at Ibrox. Stewart Robertson, who was tasked with sourcing financing of last resort – including invoice financing – suggests that he borrows from the only loan sharks that are prepared to sit down with the financially incontinent club. The Close Brothers reluctantly agree to advance some much-needed working capital but insist that Stewart relinquish Edmiston House and The (almost legendary) Albion Road Car Park should his chum Dave default on his debt.

Given that there has been so much spin being generated by Yuanker Traynor and his SMSM lickspittles, not to mention a masterclass in sophistry by RIFC Managing Director Stewart Robertson, one could be excused if one could not follow the plot.

Allow me to piece it together for you. There was no interest in Morelos from any Chinese club. The figure of £8m was a figment of Yuanker’s imagination. Note how when an injection of working capital has been sourced interest in Morelos has suddenly ‘cooled.’ Given that this squirrel was brought to the boil by Traynor a more apt description would be evaporated.

The beleaguered Lite board attempted to pawn the future sale of Morelos with Close Brothers. They pointed to interest from China. They ensured that the SMSM were singing from the same hymn sheet. They lobbied Close Brothers Premium Finance to advance them £3m, securitized on Morelos.

Sales & Marketing Director Paul Trail demurred. He did not come down in the last shower. His company had a history at Ibrox. They had provided the working capital to refurbish and renew the Ibrox catering facilities. The interest rates at that time were onerous.

This debt was eventually discharged in 2016. This opened the door for Robertson, but Trail would not play ball with The Morelos Myth. He insisted on bricks and mortar. Edmiston House was a sweetener in the deal but the jewel in the collateral crown is the car park.

Planning permission for The Club Deck is predicated on the car park being an assembly point in the event of an emergency evacuation. The owner of the car park can therefore hold the club to ransom.

The Club Deck, which cost approximately £20 million, was partially financed by a Football Trust grant of £2 million and a debenture issue that raised £8.5m. Sir Bribe & Lie borrowed the shortfall from The Bank That Likes To Swing The Lead, aka The Bank Of Scotland. Gullibillies including BBC Freemasonry’s Roddy Forsyth, bought debentures for between £1,000 and £1,650 each, which guaranteed them the right to buy a season ticket in the Club Deck for 30 years.

Call me a cynic (many have done so) but did King not assure the RIFC auditors that he would step up with a £7.2m interest free loan to keep the wolves from the door? Why pay exorbitant interest rates when the Ibrox estate was being looked after by its very own Uncle Vanya in Dave King? Why has King suddenly fallen under The Close Brothers spell?  Surely he is not planning on pulling an impecunious fast one at The Court of Session? Perish the very thought. What about his personal guarantees to Campbell Dallas and Hamilton Academicals? Have Close Brothers backed the wrong horse?

Ethereal Entity was impervious to the whip on its last outing in Edinburgh.

Stewart Robertson has stepped up with a statement that the prevailing narrative of administration in January was wide of the mark. That being the case why did he not step up in January to issue this statement? Why was there a concerted effort to punt Morelos, Pena and Alves to get them off the payroll?

The crisis in January was real. They were running on fumes and did not have the funds to pay the first tranche of transfer fees until August. When they tried this on with Brighton they laughed in their faces.

£3m and a deep run in the Scottish Cup – courtesy of McRae and his corrupt cabal at the SFA – might just keep the lights on. However if the share issue is vetoed, as I anticipate, how can the Bent Brief’s Club 1872 invest another £1m in worthless shares?

Those who thought that Dave King was the messiah are now discovering that he is a very naughty boy;  a fact not lost on the TPE and The Court of Session.

Firhill for thrills, Ibrox for Chills will soon be introduced to the Scottish football lexicon.

Have The beleaguered board procured a Provident Cheque to secure a solvent restructure? 

 

 

 

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22 thoughts on “Have The Close Brothers Backed The Wrong Horse?”

  1. Being a person with no claim to any real knowledge as to the workings of banks or finance providers. The first thing that came to my mind when hearing the frothing announcement of an ‘overdraft’ from Close Bros and how all is rosy in the
    ‘Garden of Govan’.
    Why are Metro Bank not willing to provide such a service?
    Is this not the question any sevvy with a functioning brain should be asking.

  2. As you say JJ, if said financier were also to be taking fees for guaranteed involvement in said solvent restructure then you can see the logic …for them at least.

  3. Has Metro Bank jumped ship prior to the arrival of the cold shoulder?
    Over the last few weeks there has been a sustained media campaign to promote several porkies.
    The Morelos bid, now apparently in cold storage.
    The business being well funded despite sourcing monies from a lender, at no doubt onerous rates, with property assets pledged as security.
    Is this act not proof that King has reneged on the funding promises he made to the auditors?
    The rags are also reporting that King is in talks with the Takeover Panel…..about what?
    The COS has made a ruling which he’s appealing over the next few weeks.
    Why would he be talking to TOP?
    King ran rings around SARS for years before they eventually got their pound of flesh.
    Surely he won’t get away with the same tactics in the UK having knowingly driven a horse and cart through TOP regulations?

  4. JJ

    I recently watched the film “the Big Short”, which tells the story of the few people in America who worked out the sub-prime mortgage crisis prior to anyone else. What peaked my curiosity was towards the end of the film the main groups all could see that the banks were selling Junk, but still receiving triple A ratings from the ratings agency’s, the SCC didn’t investigate, and bankers colluded with one another to maintain the Big lie.
    As we all know this perfect storm of lack of regulation, hubris and a we’re all fucked if it does come out, led to the biggest crash in decades.

    The Close Brothers funding is almost the same as Alan Schwartz confidently saying that people should still invest in Bear Sterns, as the share price was falling 30%.

    In the same way as it took some time in America for this to fall apart, it’s only a matter of time here.

    I look forward to the cold shoulder, and effect that will have not just on Metro but also Close.

    1. The first thing my most trusted contributor and confidante stated was how risky this was with King’s impending pariah status. Do they really want to get their hands on Govan real estate and punt it at a profit to Sir Bribe & Lie?

      1. this was my thinking as soon as close brothers(spit) name was mentioned,lets hope they all get it in the neck,cant wait

      2. Hi JJ.

        Close Brothers must be the Close Finance Mob.

        Look them up and you will find they specialise in sub prime end of car market. They finance older cars thats their speciality.

        They are know as a skanky finance company, they deal with people who have bad credit etc.

        Dont be surprised if the rates of the overdraft are as high 10-15% flat rate….. more that double the going rate.

        Minimum they will be 6-10% flat rate.

      3. JJ

        Isn’t this compounded by potential gratuitous alienation of assets from the liquidation in 2012 ? (Yet to be settled).

  5. accounts stated they needed money. they claim themselves that they dont need money and continue to spend like a redundant salesmans wife. they’ve got themselves access to finance to see them through until season tickets renewal and they are celebrating. cause there is nothing better than kicking the can down the road. The only genuine option for this omnishambles is to cut cost, live within their means and get people who know how to run a football club. Otherwise the newco will end up like the oldco.

  6. Stewart Robertson quoted as saying it’s unusual for a business with a £30m turnover not to have an overdraft facility.
    Well I may not be an honourable membet of ICAS but I certainly wouldn’t be shouting this from the rooftops as the current entity is the bastard offspring of a business that went bust and is cutrently being liquidated leaving behind tens of millions of pounds of debt.
    On top of that many of the current board saw at first hand the previous ship sinking and this time around the Captain is a convicted criminal and not a Knight Of The Realm.
    For clarification that’s not to say that many KOTR have been very naughty boys.

  7. He who controls the message controls the world. To all intent and purposes this is RIFC finally securing Bank facilities after 6 long years of soft loans. The amount, as you say, will be safely secured against assets and the crippling onerous rates which Close have extracted will be akin to Wonga and any other loan shark of last resort. No matter. It is a good news story for the Gullibillies. Close Brothers will have belt, belt, braces and braces as security and, if its The Albion car park, a key strategic part of the jigsaw should ownership pass to them following an insolvency event ( clever that Ibrox has again escaped unscathed). However even a £3M cash securitised injection is a sticking plaster and at best will be only a bridge. What will not be publicised will be RIFC stark reality of considerable losses and considerable operating costs increase with influx of loan Rangers since beginning of year. Only a considerable injection ( a la £7M transfer fee?) would solve their current situation, how they deal with working capital requirements and the impending Cold shoulder obstructing their share sale will be for another day. This morning is about cash secured so the Gullibilies are pleased. However the clock is ticking on CCKs day of reckoning……..

  8. The Compliance Officer at the SFA must have his hands full with his review of the SFA licencing procedures!
    Otherwise he should he calling in Levein for his slanderous remarks about the Celtic and Scotland captain.
    This coming from a manager of the team joint top of the yellow/red card table in Scotland and who himself assaulted a team mate on the field of play.
    Not content with that he’s now saying that Brown got himself booked deliberately last week so that his suspension would kick in early therefore he would be free to play in the Rangers game.
    I though the clown’s earlier remarks were actionable, these certainly are.
    Broonie/Celtic should have their briefs all over this and shut Levein up.

  9. The masterclass in sophistry from Stewart Robertson (and Alastair Johnston) is matched only by Dave King’s travels into his own world of solipsism. It is remarkable to watch officers of the club celebrating an injection of working capital as if they had just secured a European trophy. Stunning stuff and an example of just how dire things are at Ibrox. This latest initiative with Close Brothers may provide temporary relief. But the fundamental problems haven’t gone away……….lack of corporate governance, lack of leadership, lack of transparency and a shortage of talent, both on and off the pitch. The board members have utterly failed in their fiduciary duties and borrowing money to keep the lights on is another example of that. Worse, still, the club is hailing the deal with Close Brothers as some sort of success. A sign that they remain some sort of global institution which is capable of attracting top investors. Well, it’s not. It’s a small loss making business in Govan which is unfamiliar with profit, prudence and sustainability.

  10. Appropriate its a brothers bank that’s bailing them out . There must be close to 20m debt in there now or technically all of next seasons, season ticket money spent already. Still they did win the petrofac.

  11. Aha got it now Celtic report 30mill cash in the bank and trfc owe the bank 3mill.

    Chalk and cheese move over as different as Celtic and rangers bank accounts is miles more accurate.

    Has any other firm of auditors in the history of auditing ever had more piss taken.

  12. A loan of $3,000,000 and a repayment of $3,300,000 in May means that the first 1000 mugs to buy a season ticket give all their money not to their team but to financiers. Main problem however is that expenses still out strip income. Emergency loans when the ST money runs out in October will be even harder to obtain. Postponing liquidation for a few months relies on income significantly outstripping expenses. That is not possible.

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