GREEN MAKES RANGERS CVA APPEAL
Charles Green has appealed to Rangers' creditors to approve the Company Voluntary Arrangement - even though they will not know exactly what they are being offered.
A 75% majority, based on sums owed, is needed to pass the proposal which was issued on Tuesday by administrators Duff and Phelps and set out in detail on the club's official website.
Green's prospective ownership consortium has pledged £8.5million - £8.3million of which is a loan to be repaid back with interest by 2020.
In a statement released on Tuesday on the Ibrox club's website, it was claimed the final amount available to creditors could be in excess of £25million, depending on the outcome of litigation.
However, Duff and Phelps, who hold secure creditor status, have accrued operating charges and legal fees of over £5.5million which has to be paid while the outcome of a tax tribunal could send the club's debt above £134million.
Consequently, the CVA document was unable to offer a 'pence in the pound' figure to creditors but in a statement Green asked them to think about the future of Rangers when they meet to consider the plan at Ibrox on June 14.
He said on Tuesday: "Today is an extremely important milestone for Rangers to begin the journey back to where the club belongs - as a leading sporting institution that can hold its head high both on the field and off it.
"I have great sympathy with creditors, particularly small local businesses in the community around Ibrox, who have suffered in the lead-up to administration.
"However, I fervently hope that creditors will form the view that the best interests of everyone will be served by Rangers continuing as the successful club it is and recovering as a business in the forthcoming seasons.
"The consortium I am leading can only do so much to heal the wounds of the past, but we can do something about the future and that is where our main focus must lie.
"I hope creditors will approve this proposal and we can begin the task of rebuilding Rangers in earnest."
Paul Clark, from Duff and Phelps, was also sympathetic to the plight of the creditors as he asked for their help in getting the club back on track.
He said: "This proposal offers the best return for all stakeholders given the position the club is in.
"If approved by the creditors, the CVA proposal will rescue the club and finally enable the company to exit administration.
"Since our appointment, it has been our principal objective to propose a CVA, which is the preferred solution to what has been a catastrophic period for the club.
"That view is shared by everyone with Rangers' interests, and those of Scottish football, at heart.
"For some time, the prospect of presenting a CVA proposal with a realistic chance of success appeared remote.
"However, we are delighted now to put forward a solution which we think will take things forward as originally envisaged.
"We should remember there are many stakeholders who have suffered financial losses as a result of Rangers being placed into administration.
"Regrettably, there is no solution available that allows these parties to recover their losses in full.
"However, after a very intensive bidding process for the club we can now say that the offer being put forward as part of the CVA is the best solution available to creditors and we hope they will approve the proposal.
"Having issued the proposal, it is now a matter for the creditors to consider what is on offer and it is their decision entirely as to whether the terms of the CVA are acceptable."
Finance firm Ticketus is owed £26.7million, while HMRC is owed £21.5million in unpaid PAYE tax and National Insurance but the explanatory statement confirmed the uncertainty of what monies any of the creditors could expect.
It read: "The administrators intend to make a distribution to creditors as soon as they can should the CVA proposal be approved.
"The overall costs of the administration process will be deducted from the funds available.
"All costs and charges incurred in the administration and the CVA are proper expenses at levels which are in keeping with best practice guidelines set by insolvency practitioners' regulatory bodies.
"All of the administrators' own costs are subject to approval by creditors.
"The final amount available to creditors could be in excess of £25million, depending on the outcome of litigation. The precise amount will not be known for some months.
"At this stage, there are two outstanding issues that will have an affect on the quantum of funds which can be distributed to creditors.
"The first matter is litigation brought by the administrators against the former lawyers for Rangers, Collyer Bristow. Should that be successful, further funds will be made available to creditors.
"The second is the outcome of the HMRC first tier tax tribunal. Should the tribunal find against Rangers that will increase the quantum of HMRC's claim on funds available to creditors, thus diluting the settlement available for all other creditors."
The CVA proposal is being sent to approximately 400 trade creditors, over 6,000 fans holding debentures and all shareholders within the club.
If the plan is approved at the June meeting, there would then be a further 28-day cooling-off period meeting before Rangers could come out of administration.
If no CVA is agreed, Green plans to push through a newco purchase of the assets.
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