Rangers FC signals administration move
Rangers Football Club has issued a statement following news that it has lodged legal papers at the Court of Session in Edinburgh, signalling its intention to go into administration.
The statement in full reads:
Rangers Football Club plc has today announced it has filed a notice of intention to the Court of Session in Edinburgh to appoint administrators.
The club will conduct its business as usual and will not be in administration until it decides whether to formally proceed with an application to appoint administrators.
Until such time, the club will not face any sanction from the football authorities in terms of points deduction within the Scottish Premier League.
Sanctions such as a 10-point deduction will only apply if the club proceeds with the appointment of administrators. It is expected to be 10 working days before a decision is made whether to appoint administrators.
The club's owners believe there is no 'realistic or practical' alternative to this course of action in order to secure the long-term future of the club”
Suppliers to Rangers Football Club and the club's business partners and sponsors are currently being informed of today's announcement and arrangements between the club, suppliers and creditors will continue as normal.
There will be no impact on season ticket holders and shareholders. Season tickets will continue to be valid for this season and any commitment to a season ticket for next season is secure.
The club is continuing to have dialogue with HMRC in the hope that a formal insolvency procedure can be averted and has put forward pragmatic proposals.
The club's owners believe there is no "realistic or practical" alternative to this course of action in order to secure the long-term future of the club.
Should administration take effect, the club is proposing a Company Voluntary Arrangement (CVA).'Big tax' case
The club wishes to seek the protection of a moratorium from HMRC action whilst a CVA proposal is made to creditors. The club has put forward a CVA proposal to HMRC in which creditors would be paid and provision made for the legacy HMRC case, commonly known as the 'big tax' case.
This, if approved by creditors within a month, would minimise any points deduction and enable the club to participate in European football next season.
The club has engaged Duff and Phelps, a specialist restructuring practice to assist in finding a solution to the present position.
Should the club proceed into administration, the appointed administrators will in all likelihood implement a cost-cutting programme and staffing levels will be reviewed across all departments of the club's business.'No alternative'
Rangers chairman Craig Whyte said there is no "realistic or practical" alternative to this course of action due to a combination of the club's ongoing financial situation and the impending result of the HMRC first tier tax tribunal.
The tribunal relates to a claim by HMRC for unpaid taxes over a period of several years dating back to 2001, which, if decided in favour of HMRC, could result in liabilities and penalties substantially more than the £50m reported which the club would be unable to pay.
End Quote Craig Whyte Rangers chairman
In addition to the HMRC issues, it has been abundantly clear to me the club faces serious structural and financial issues which will continue unless they are addressed”
Further investment in the club from any source would be impossible as the threat of winding up by HMRC cannot be removed. The Rangers FC Group, the majority shareholder in the club, is prepared to provide further funding for the club on the basis the funding is ring-fenced from the legacy HMRC issue.
Mr Whyte said: "It is extremely disappointing the club finds itself in this position but decisions have to be taken to safeguard the long-term survival and prosperity of the club both on and off the field.
"The harsh reality is that this moment has been a long time coming for Rangers and its roots lie in decisions taken many years ago. If we do not take action now the consequences and the risks to the club are too great.
"In addition to the HMRC issues, it has been abundantly clear to me the club faces serious structural and financial issues which will continue unless they are addressed.
"There is no realistic or practical alternative to our approach as HMRC has made it plain to the club that should we be successful in the forthcoming tax tribunal decision, they will 'appeal, appeal and appeal again' the decision.
"This would leave the club facing years of uncertainty and also having to pay immediately a range of liabilities to HMRC. Even if the club were to succeed in the tax tribunal, it would still face substantial liabilities. Zero liability will not happen.
"Whilst it appears that a consensual restructuring looks unlikely outside of a formal insolvency procedure, the above steps, if agreement cannot be reached with HMRC, will bring an end to the legacy threat of closure and will provide stability required to enable the required investment to be made into the future of the club.
"I can, however, reassure Rangers supporters that the club will continue and can emerge as a stronger and financially fitter organisation that will compete at the levels of competition our fans have come to expect.
"At this point I would ask all Rangers supporters to continue to show the tremendous support they have shown to the club, Ally McCoist, his management team and the players."