http://www.heraldscotland.com/news/home-news/revealed-banker-s-ultimatum-to-debt-hit-rangers-1.928574Rangers’ banker has threatened to put the football club into administration in a dramatic intervention to tackle its mounting debts.
Lloyds Banking Group issued the ultimatum to the club’s shocked board as the only alternative after it initially rejected a “devastating” business plan based on swingeing cuts.
The Herald can today reveal the extent of the turmoil at Ibrox that has left Rangers under the control of its banker. Lloyds has placed Donald Muir, who helped rescue Northern Rock, on to the board as its representative.
It can also be revealed that Dave King, the Glasgow-born multi-millionaire and former investor in the club, now based in South Africa, is the leading contender to buy Rangers. He has opened negotiations but is having difficulties in striking a deal for the club.
It is believed the price the bank wants for Rangers is £30 million, equal to the club’s total debt.
Sources close to the club told The Herald last night: “The business plan from the bank will only do one thing – strangle the club slowly. A new owner is a must or else Rangers will be in dire straits on and off the pitch.
“The board tried to fight it as much as it could, but was told it would be placed into administration. The effects of the business plan will be devastating.
“Dave King wants to buy Rangers, and there are others expressing interest, but the bank wants a premium price of £1 for £1 in terms of the debt so nothing is imminent in terms of a deal.
“Its stance is surprising when, across the country, it is selling off assets at 25p, 30p or 40p to the pound in terms of debt.
“But because this is Rangers, it is obviously viewing it differently. Maybe it feels wealthy fans will let their hearts rule their heads, but all the while the club is now entering dangerous grounds.”
There is also interest from businessmen in the west of Scotland, who could combine to add their resources to those of Mr King, or make their own moves to buy Rangers.
Former chairman Sir David Murray, who remained majority shareholder after he stood down on August 26, is no longer involved in making key decisions.
Mr Muir, who was placed on the board of Rangers nine days ago at the bank’s insistence, is now effectively running the club.
He has been put in to oversee an immediate attempt to reduce debts, which would include the sale of star players over the coming months subject to the bank’s approval, with no replacements.
The bank’s plan was put to the Rangers board this month and shocked its members, including new chairman Alistair Johnston and chief executive Martin Bain, who believe the club has to be kept as attractive as possible to lure a new owner or investor.
The board refused to accept the business plan the bank put in front of them.
However, they were told that Rangers would be put into administration – which would probably allow the bank to recover its cash – if the plan was not accepted by Friday, October 16. Later that day, Mr Muir was confirmed as a board member.
In the aftermath of Saturday’s match against Hibernian, manager Walter Smith admitted the bank – which is 43% owned by the taxpayer and now controls the Bank of Scotland brand – was effectively in charge.
Lloyds Banking Group said at the weekend: “The bank continues to be very supportive of both the club and the board as they manage the business through the more difficult economic conditions currently prevailing.”
Author