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Edinburgh business backs Hearts takeover Bidco...before it becomes Fanco

Several Edinburgh business people will provide the immediate finance for the Foundation of Hearts' bid for the administration-hit club before being gradually paid back by supporters' contributions, it was revealed today.

The fans' group, which was named as the preferred bidder for Hearts by administrators last Thursday, outlined the structure of its offer at Tynecastle.

The proposal involves two companies - Bidco and Fanco - entering into a binding contract that would ultimately deliver fan ownership of the Scottish Premiership club.

The Foundation stressed that the Edinburgh business people are Hearts supporters who stand to make no personal gain from the deal.

Foundation of Hearts chairman Ian Murray, a Labour MP, said: "The bid team working on behalf of the Foundation will set up Bidco to provide the capital resource to buy the club, backed by Edinburgh business.

"On agreeing contractual terms with BDO to acquire the club, the Bidco/Fanco partnership will be created to deliver fan ownership in a controlled fashion.

"Doing so allows the club's finances to be stabilised, and for there to be an orderly and calm transition to supporter ownership.

"The Bidco/Fanco partnership delivers multi-layered protection both now and for the future of Hearts. It's a win-win situation."

Supporters will have an immediate influence in the running of the club should the deal go through with the ownership transition predicted to take between three and five years, depending on the number of fans contributing.

The private individuals are not being named while the bid remains in the balance - the administrator of Lithuanian-based Ukio Bankas needs to approve an offer.

It is understood the Foundation's initial bid was £3million to go towards a Company Voluntary Arrangement, but the bank has security over Tynecastle and could spark a sale of the stadium separately from the club if not unsatisfied with that amount.

A recent report by administrators BDO revealed the club's total debt was £29.5million. Most of that is owed to both Ukio Bankas and another Lithuanian firm, UBIG, which owns half of the club's shares.

More than 6,700 fans have pledged money to the club via direct debits worth between £10 and £500 per month. The Foundation of Hearts will begin to draw money from those direct debits on September 2.

Joint-administrator Trevor Birch of BDO stressed that more work was needed to complete the purchase.

Birch said: "With the nominating of Foundation of Hearts as preferred bidder and the announcement of its bid structure FOH has now reached the next stage in the process of Hearts exiting administration.

"It has been a great achievement by staff, players, management and fans to enable the club get to this stage.

"However, there is still some way to go and we will work with FOH to ensure that the bid produces an acceptable CVA for the creditors.

"At the moment we cannot put a timescale on the process as a number of negotiations with various parties still need to take place and we are waiting for the appointment of administrators to UBIG to be ratified.

"However, we can ensure that collectively we make as much progress as possible on our side so we are able to finalise the matter quickly once the opportunity presents itself."

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