Rangers “need more cash” as Ashley tops-up loan
Sports retail tycoon Mike Ashley has thrown a further £1 million lifeline to Rangers after the cash-strapped club indicated that it will need further funds to compensate for a slump in attendances.
Ashley’s Mash Holdings will extend the £2m credit facility agreed on 27 October which is bound to heighten speculation that he is steadily increasing his grip on the Ibrox club. However, he has agreed to surrender the naming rights to the club.
In a statement issued this morning to the London Stock Exchange Rangers said the club has suffered from lower than expected match attendance which has “exacerbated the financial condition of the business.”
The board has begun a cost cutting exercise, but said “further working capital in addition to the facility will be needed before the end of the year.”
Ashley, the biggest shareholder in retail chain Sports Direct and owner of Newcastle United Football club holds 8.92% of the voting rights in Rangers through Mash. It also has an indirect holding in Rangers Retail Limited, a 51% owned subsidiary of Rangers Football Club Ltd.
The board said it discussed offers of financial aid “in detail” with two potential funders and also had discussions with an additional potential funder who expressed interest at the end of the period of the board’s discussions with the two original potential funders. These included South Africa-based Dave King and the Sale rugby league club owner Brian Kennedy.
The Rangers board said that following these discussions, the independent directors – David Somers, Norman Crighton and James Easdale – narrowed down the options to two proposals that were able to provide proof of “immediately available and uncommitted funds and proof of the identity of the funders”.
It said that “as such the independent directors identified the two proposals that were, in their opinion, capable of immediate delivery.
“Having assessed these two proposals, the independent directors also consulted with major shareholders holding a majority of the voting rights in the company.
“Following such shareholder consultations and with the support of such shareholders, the board resolved to enter into the facility. The independent directors, consider, having consulted with Daniel Stewart its nominated adviser, that the terms of the facility are fair and reasonable insofar as shareholders of the company are concerned. The independent directors would like to thank all the individuals who showed an interest in helping the company.”