As Aberdeen and Rangers Lite shared the points in a hard-earned scoring draw in pursuit of a guaranteed Europa League qualification spot – with Lite at times emulating the hammer throwers at the dairy farm that is Tynecastle – the real UEFA action is off the park. Traynor will be apoplectic with rage at the following tweets by Richard Wilson which confirmed information that was posted on my Twitter timeline as a response to my King Q&A piece.
Let’s restate the known ‘knowns.’ In the last available audited accounts, and not the interim accounts wish list, the auditors included the following clause apropos material uncertainty
“We draw attention to note 1 to the financial statements concerning the Group’s ability to continue as a going concern. In order to continue operations for the next 12 months the Group is dependent upon raising additional finance to cover the projected cash shortfall of £4m in season 2017/18 and a further £3.2m in season 2018/19. Failure to secure additional funding would result in the existence of a material uncertainty which may cast significant doubt as to the Group’s ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern. Our opinion is not modified in respect of this matter.
Furthermore Campbell Dallas make the following assumption:
“The forecast assumes the Club will challenge for the European places in the Ladbrokes SPFL Premiership in 2017/18 and participate in European competition in the season thereafter.”
Close Brothers Asset Finance, Alastair Johnston and Barry Scott covered this year’s shortfall, but next year’s conservatively estimated £3.2m is coming down the pike. This does not include the asset finance deal, which takes the material uncertainty to north of £6m. Now that Lite don’t have Regan batting for them they don’t have a proven liar making representations on their behalf, unless of course Sandy Bryson has stepped up to the plate.
Of particular note is the sustained losses of £18.85m in the past three fiscal years. Lite will try to fob off as much as possible as stadium refurbishment costs, failing to mention that all the scaffording has been provided free of charge.
But the real kicker is RIFC Plc’s inability to convert debt of circa £20m from the concert party into equity. When added to the Close Brother’s debt, the grand total exceeds the UEFA maximum debt threshold of 25,000,000 Euros. RIFC plc are currently running a debt level north of 26,000,000 Euros.
King was of course lying about the Section 9 mandatory offer having no impact on the member club. The concert party of Messrs King, Letham, Park & Taylor are prohibited from participating in the rights issue. They have no means of transforming their debt to equity.
An associate of mine, with a direct line to the Panel, has confirmed that a rights issue can proceed if underwritten by a NOMAD and that King, Park, Letham & Taylor play no part. The Panel are however considering their position and may raise an injunction against the so-called independent directors. If King sold at 27.5p it undermines the mandatory offer price of 20p.
There is a factor that no-one else has considered. King has been ordered to make an offer for all stock not held by the concert party. Should he comply after the rights issue he could face the purchase of up to an additional 108 million non concert party shares at 20p. £21.6m if fully subscribed.
If £6m in working capital is raised, this will be swallowed up by the trading deficit and by paying off Close Brothers in February 2019, leaving the one green bottle that is Gerrard in danger of accidentally falling. Gerrard is both green by club allegiance and in both coaching and man management. Kids schooled at the Liverpool Academy from the age of six are much more malleable than the fractious pros at The Auchenhowie Safari Park, where El Buffalo Morelos roams free.
King’s headless chicken is coming home to roost. Is it any wonder that he insisted that his coterie of hand-picked SMSM lickspittles did not go to print until Monday evening at 11pm as he did not want his whereabouts revealed until he was reclining in his first class bed en route to Johannesburg?
Is Summons Dodging the sport of King’s?