Rangers are expected to reveal figures today that prove the club’s debt is falling, but they are unlikely to unveil a new owner as the Ibrox takeover remains elusively out of reach.
Despite speculation yesterday that a deal with Craig Whyte, the businessman, was close to conclusion, Alastair Johnston, the Rangers chairman, sounded a note of caution as he prepared to announce a set of interim results today that show debt has been cut to £21 million.
Johnston flew into Glasgow yesterday from his base in the United States, and, along with other board members, met Whyte, whose a long-running bid to become the new owner and buy out the stake of Sir David Murray has become a something of a saga.
“It is a very fluid situation but meetings are ongoing and it is very much an ongoing process,” Johnston told BBC Radio Scotland. The Rangers chairman will this morning announce financial figures for the last six months of 2010 that are likely to illustrate that another £6 million has been shaved off the club’s debt to Lloyds Banking Group from the sum of £27.1 million recorded last June.
That could be the signal that Whyte needs to seal a deal with Murray, who bought the club in 1988.
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Whyte has been attempting to purchase Rangers since November, but with discussions with Lloyds having progressed significantly in recent days, the only remaining hurdle for the venture capitalist is to conclude terms with Murray. The reduction in debt will enable Whyte to pay less than the original figure of around £33 million that was quoted when he embarked on the project. Whyte plans to take over 75 per cent of Murray’s shareholding, with Andrew Ellis, the London-based property developer, becoming a 25 per cent partner, and the price could come down to £27 million now.
It is understood that the conclusion of any such deal would leave Murray responsible for any of Rangers’ remaining tax liabilities.
Earlier this week it was understood the main sticking point to the deal related to financial demands by the bank but Lloyds rejected this notion, saying it “categorically denies the existence of any exit or ‘redemption’ fee.”
The tax issue relates to Rangers’ dispute with the HM Revenue and Customs, with the case likely to be heard next month, although a judgment is unlikely before July or August.
The dispute concerns an Employee Benefits Trust that began at Rangers in 2001. The annual reports show that a total of £47 million was contributed by the club to this fund to recompense players. If found liable, Rangers could face a bill of £30 million-plus, but the club is defending the case robustly.
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Whyte had targeted yesterday for the deal to be concluded, but it needed his legal team to have more time to scrutinise the paperwork. Lloyds are thought to be seeking a further reduction of £2 million in the wage bill for next season.