There are times when Graham Wallace wonders why his message is not heeded.
On several occasions he has insisted that Rangers International Football Club will not fall into administration, only for rumours to keep persisting about an imminent cash crisis. "How many times do I have to say it?" he asks. "I've staked my personal reputation on this." It is, of course, a legacy of his predecessors, since Craig Whyte, Charles Green and, to a lesser extent Craig Mather, eroded the trust of the Rangers support.
The Ibrox club attempted to position yesterday's confirmation to the Stock Exchange about a £1.5m loan facility being provided by Sandy Easdale and Laxey Partners as good news. Wallace stressed that it had always been part of the business plan he inherited last year. If it was, it explains his certainty about administration not occurring, but runs counter to statements about Rangers having enough cash in the bank. The loan facility allows the club to meet its running costs until more revenue comes in, during the summer, so is effectively buying time.
"I guess the club had never come out and said, 'as part of its future outlook we will be looking for some sort of facility'," Wallace said. "[But] it's all just part of effective working capital management."
Rangers supporters reacted with alarm, understandably given events of the past two years. Around £22m was raised when RIFC was launched on the Alternative Investment Market, while two tranches of season ticket money have come in, yet Rangers still need a loan facility to "provide some financial headroom".
It is a complex scenario, since many of the outgoings that contributed to the £14m loss Rangers suffered last year were non-recurring. The interim results for the year up to December 31, 2013 are due towards the end of next month and are likely to show a reduction in losses.
Even still, as Wallace spoke yesterday of the context of the loan facility, the three main supporters groups were voicing their concern about the arrangement. Other shareholders were prepared to provide secured funding at different terms than those of Laxey Partners, who are receiving £150,000 for their loan of up to £1m, which is payable either in cash or shares. For the fans, this prompted the question of whether all shareholders have been treated equally.
"We had a number of conversations with a cross-section of shareholders and other institutions," Wallace said. "There were several alternatives available to the board. We decided to go down this route after taking advice from our NOMAD [nominated advisor, Daniel Stewart] and looking at the overall economics of it. It's not [1.5m to pay the wages for the next three months], it's a facility to use against our operating costs, as they are defrayed by our ability to generate income and that income coming in."
Rangers' last set of accounts contained a £2.5m unsecured lending facility from directors. According to Wallace, this has never been drawn against and is no longer in place. Some fans have also raised concerns about the Easdale/Laxey loan being secured against Edmiston House and the Albion car park, although Wallace also defended that issue. "It's very simple for us to support the facility with that property," he said, "and [for that property to] come back to the club unencumbered when the facility is repaid."
Yet repaying the loan takes £1.5m out of next season's revenues, at a time when cost-cutting is still to take place. Ally McCoist, the Rangers manager, spoke yesterday of being unable to plan effectively for that campaign, which is likely to be in the SPFL Championship. There is no scouting network, Rangers at best will likely be restricted to free agents, and even then the squad may need to be cut. "Everything will be determined by the outcome of Graham's 120-day review," McCoist said. "I don't know what's happening regarding my budget. For the team to move on we need some new faces."
Dave King, the former Rangers director, wants to lead a new round of investment through a share issue. Wallace intends to complete the business plans for the next three to five years before seeking additional funding to prepare Rangers for returning to the top flight. "The board has not yet determined the timing or indeed if another share issue will happen," he said. King's involvement would be likely, though, to dilute other shareholders, who would subsequently lose control.
With season ticket renewals being the most prominent and effective way for fans to provide or withhold their support for the board, that is likely to become a critical issue. If fans delay renewal, or only buy tickets on a match-by-match basis, the board will face difficult choices. Trust, or the lack of it, remains the significant currency.
"Credibility and trust take time," said Wallace, who last week launched a survey of fans' views. "I laugh when I see some of the comments about me having resigned three times in a week and been missing from the office. Any decent blue-chip company that you're looking to become a part of Rangers is looking at [stories about] turmoil and administration. That's why the hysteria can deflect from the good work that is going on at the club."