Rangers International Football Club (RIFC) yesterday confirmed it was considering a new share issue and also wants backing for a plan that would allow it to raise more cash in the future.
But Chris Graham, from the Union of Fans, said: "We know that £4m is not enough to do anything substantial to improve the club. It is literally just money to keep the lights on and I'm not even convinced it keeps the lights on much beyond Christmas. There doesn't appear to be any long-term plan."
The RIFC board released a statement to the London Stock Exchange yesterday afternoon stating it was considering issuing further equity, with existing shareholders able to buy shares in order to keep their stakes at the same level. RIFC is also seeking support from institutional investors who might be prepared to underwrite the share issue.
The company said: "Discussions are ongoing and there can be no certainty of the outcome of these discussions."
If large numbers of existing shareholders do not take up their rights then the underwriter would step in to make up the shortfall and be left with an enlarged stake. In an unusual move, RIFC said it would cap the fundraising at €5m (£4m), which would allow it to avoid publishing a share prospectus. According to RIFC, the driver of that was to avoid cost.
Chief executive Graham Wallace's business review, published in April, stated a plan to raise £20m to £30m to be invested in the club over the next three years. However, at last year's annual general meeting, RIFC did not get shareholder approval to issue shares on a non-pre-emptive basis. That means it is currently unable to issue any new shares to investors or third parties that are not already shareholders.
The club yesterday said it would seek approval at this year's AGM to change the status quo and allow placements of shares with institutional investors at this year's AGM.