Rangers deny £20m drive is bid to keep club afloat

City Editor

Friday 12 October 2012

RANGERS last night insisted a £20 million fundraising drive is not simply designed to keep it afloat as chief executive Charles Green said the football club is worth up to £30 million.

SALES PITCH: Charles Green, alongside finance director Brian Stockbridge and Ally McCoist, appealed to potential investors to get behind the embattled club. Picture: PA

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TIM SHARP CITY EDITOR

Mr Green was in London meeting potential investors as he confirmed plans to list the Scottish Third Division club on the junior Alternative Investment Market alongside rival Celtic.

The club, whose assets were bought for £5.5m six months ago, said it would plough the proceeds into players, developing facilities and "working capital".

This raised concerns among some in the City that the club needs the money to keep going.Simon Denham, chief executive of financial services firm Capital Spreads, said: "The immediate thought is that this is probably the operating revenue shortfall for this season and the club will be looking for a similar injection every year until Premier League – or possibly near-premier – status is regained."Asked if the club needed the share sale to pay its bills, Rangers' finance director Brian Stockbridge said: "We can continue without it."Instead, he insisted the money would "bring all the plans forward".Mr Green, who led the buyout of the assets, said the club currently has 19 investors after recently conducting a second fundraising.Their number is thought to include Newcastle United owner Mike Ashley and Dubai-based Arif Naqvi, chief executive of private equity firm Abraaj Capital.Mr Green said: "I think this business today is worth £25m to £30m."The former chief executive of Sheffield United said the share offering would allow fans a chance to buy a stake in the club and bring in institutional investors. Shares would be priced at £1 to £1.50 each, against the 50p-a-share initial fundraising and £1-a-share follow-up.The minimum investment is likely to be £500, although Mr Green said fans who wanted to spend less could buy shares via stockbrokers and accountants after they list on the stock exchange.While noting shareholding fans lost out when Rangers went into administration this summer, he insisted it was still the right time for a flotation.He said: "In two years' time the price of entry for the fans will be three to four times higher than we can bring them in [at] now.Mr Green wants fans to end up with 15% to 20% of the club, with institutions holding another 50% to 60% and existing investors the balance.No current investor would receive proceeds from the fundraising, the club said.Mr Green insisted he would step in to buy shares if demand was insufficient.Armed with maps and flanked by club manager Ally McCoist, himself a shareholder, Mr Green presented a series of plans to revitalise the club.Dismissing previous development proposals as "not realistic", he unveiled schemes including a hotel in the grounds of Ibrox and a £3m plan to buy and renovate Edmiston House next to the stadium and turn it into a members' club.Mr Green also talked of building links with fans overseas. He said: "The Scots diaspora is full of Rangers fans whether it is the Middle East, the Far East or America.Mr Green revealed Rangers has a 51% stake in the merchandising joint venture it has established with Mr Ashley's retail business Sports Direct, for which he plans to open a 20,000sq ft superstore at Ibrox.He talked of increasing the club's use of internet broadcasting and restricting press access to playing staff to boost coffers.He said: "I am going to stop Ally and the players speaking to the press. We want to put that on to Rangers media."Mr Green floated the idea of a £2-a-minute phone line for questions to be put to the manager.Meanwhile, Rangers' wage bill will be capped at around 30% of revenues. Mr Stockbridge said this is half the level of Celtic's.McCoist said the last six months had been the most traumatic in the club's history and the fundraising was a step forward. He added: "We must never allow to happen what has happened in the past."

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Rangers deny £20m drive is bid to keep club afloat

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