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takeover or bust?

analysis Alastair Johnston might have been candid but plenty of questions still remained unanswered.

Michael Grant reports

How is your mood on the Craig Whyte deal?

“I am realistic. I have to share with you the fact that amongst my fellow board members we have different views.”

Will it be better for the club if he takes over?

“At this point in time I would hope that Craig Whyte is the right guy and he can proceed with the discussions which we have been engaged in for the last couple of weeks. If there is a meeting of the minds on that then I would answer that positively. I would say at this point in time that I haven’t had any resistance yet. I have had a realistic approach. I have been around long enough to know that doesn’t necessarily mean ‘yes’.”

Has the Whyte camp been taken aback by how much money Rangers need?

“No, I don’t think they were taken aback. And my discussions were only with Craig. When you speak about ‘his people’ I think he is a one-man operation. I think he has people around him who do a lot of his analytical work but he is definitely the decision maker.

“He is trying to get his arms around it. I said to him when we talked back in December ‘what are you doing here?’ He said ‘I don’t know, I’m going to need a lot of help; what are you doing if I buy the club?’ He said: ‘I don’t have the skills to run a football club; I don’t know what I’m doing.’ So I said to him yesterday: ‘Have you changed your mind about that?’ He said: ‘Well I’ve certainly learned a lot.’

“I think he is a businessman who is very bright and I think he has been very strategic, historically, in how successful he has been. He has done it but keeps his cards very close to his chest. I could tell that his analysis was very enthusiastic but realistic. I would say that he is aspirational but realistic.

“During the conversations we had yesterday with him it was clear that there was more work to be done on the cashflow, with respect to the things we need not only now but going forward. A lot of the time yesterday was spent discussing the timing of the investment, not just the investment. Right now, we need more money immediately.

Was he asked to spend £30m this summer?

“The £30m is not a figure with which I am familiar. He hasn’t been asked for £30m in the summer. What we have said right now is that what we spend in the summer doesn’t necessarily have to be repeated every year. It is cyclical. We have run down this squad to the point where it can’t continue. We can’t continue to extract value on it. That’s basically the message. So the investment that I would expect in the summer is not something that you will necessarily have to repeat.”

You said there were different opinions within the board. About what?

“I said there were differences of opinion as to whether the deal is going to go through or not. The board are reflective of my view which is, if we can get this thing right, it will be good.”

How can you expect supporters to buy season-tickets when they can have no idea of the quality of players they will be watching next season?

“I know. That’s obviously what we continue to echo to the bank. That is the biggest and most consistent message we have tried to put over to the bank.”

Isn’t it true that either Whyte takes over or Rangers are in terrible trouble?

“There are other mechanisms that we would like to pursue but at this point in time, as I say, the huge contingent of what HMRC has done is actually the gorilla in the room in terms of us expediting this. The timing is not terrific.”

You and most of the board couldn’t prevent a Whyte takeover even if you opposed it?

“I can sit and scream but I can’t stop it happening.”

Rangers could face a massive bill at the end of an HMRC proBe into the use of trust funds to pay players over a 10-year period. What is the timescale for learning the final bill?

“Unfortunately it could actually go on for a long time. They had a tribunal before Christmas and they didn’t get all their evidence. So, like they do in the law, it is terminated for four months. They are starting again at the end of this month, that will take maybe a couple more weeks, then four or six weeks to come to a decision, then they’ll issue a decision, then they’ll negotiate the decision, see what the impact of it is in real terms – money – and that could go on for months.

Could Whyte be scared away by the tax case?

“No, that has been addressed significantly in terms of his due diligence. He is very aware of that.”

These interim figures reveal a new and unrelated tax bill, for £2.8m. Did you know this was coming?

“Our numbers would be £2.8m better if we didn’t have to take on this charge. It relates to more than two or three players, but it relates to an issue 10 or 11 years ago. As the Americans say this one came right out of left-field. It really, really is frustrating. No-one knew about it a couple of months ago.”

Could this new £2.8m be a dealbreaker for Whyte?

“I don’t think it is a dealbreaker. I’m frustrated by it for a lot of reasons. I don’t like this, it wasn’t in any plan, it wasn’t in our budgets or anything that we have been trying to do. We have a very disciplined approach to what we do right now and I didn’t like that appearing over the horizon suddenly. It’s a cash-flow issue and as far as I’m concerned then we don’t have that in our budget. Given the complications of his [Whyte’s] agreement with the Murray group it’s obviously got to be a factor in the buy-out.”

How much money will Ally McCoist have next season?

“The whole issue about a business plan for next year has been coloured by the possibility of the takeover. There’s been focus on that and the chance of a negative HMRC situation.”

If there isn’t a takeover, is it true Lloyds may want the wage bill reduced by £2m?

“I will stop short of answering that because there is room for providing more capital resources dependent on the HMRC situation.”

What is the club’s relationship with Lloyds like now? You say in your statement that their attitude has compromised the Rangers management.

“What we’ve been doing is engaging them for a while, with respect to if we sell players do we have any certainty that we will get all the money; 90% of it, 80% of it, whatever? It makes it tough for our management to understand and to plan for selling players when we don’t know how much of the money we’re getting to keep. It also creates an environment where the management team is reluctant to sell players because they don’t know if they’ll get enough money to replace them.

“Where the bank haven’t got it – and I won’t speak in absolutes here because they have improved and they are improving – is that they haven’t quite grasped that a year ago was when we should have been dealing with the Madjid Bougherra situation [he has a year left of his contract], not now, in terms of maintaining our value and our opportunity to sign him and extract value for him in the transfer market if that happens.”

Has Walter Smith’s success in securing Champions League money distracted people from what the bank has done?

“I do think that the bank has had the luxury of an experience that – much though it’s been great for the club for the last couple of years – the more we are successful despite all this pressure the more the bank will think we can keep going with this.”

Could Rangers have gone into administration if it wasn’t for that Uefa money?

“I don’t think administration is the right word; it would just have been scaled back to the point where I don’t think Rangers Football Club should be. We wouldn’t have the wage bill that we’ve got, the players we have, it would definitely have reflected on the quality of the product, there is no question.”

why has there been a strained working relationship with Lloyds given that Donald Muir, the “turnaround specialist” was placed on the board by Sir David Murray?

“Let’s be very clear on the situation with Donald Muir: it’s a condition of our credit facility agreement that Donald Muir is the representative of the bank on the board. This was a thing that was put in place a couple of years ago when the predecessor of the guy we deal with at Lloyds Bank was there and it’s been terribly compromising to have. It’s actually terribly compromising for Donald Muir although . . . whatever.

“It’s very tough to engage in conversations at board level about strategies with the bank when we know that the bank guy is sitting there.”

Hasn’t it always been denied that he was on the board as “the bank’s man”?

“It’s been denied by a lot of people, but I’m telling you what the issue is right now. I decided that I might as well. I think it was Donald that denied that.”

Is his presence counter-productive to Rangers with Lloyds or their future plans?

“To be honest it’s not nearly as counter-productive as it was in the early days. What happened when I got here was that the banker that was involved with us refused to talk to our chief executive or to our chief financial officer. It was one of the most stupid aberrations that I’ve ever come across and I said that to the bank when I came in. He had never met our chief financial officer. He had never met Martin Bain. After about six months I said that this was the biggest, nuttiest thing I have ever heard. To be fair, fortuitously or for whatever reason, the guy involved with the bank got replaced and then the situation became a whole lot better.”

Was honest debate possible with Muir at meetings?

“There’s no question that his presence compromised things.”

What’s the situation with Muir now?

“From my understanding of this, Muir’s relationship with Murray terminated on March 31. Donald is still on the Rangers board but his relationship with Murray Group ended on March 31. It’s a condition of the credit facility [that he remains on the Rangers board] and if he was put off it by us that would be a breach of the credit facility.

”I’ve always got on well with Donald Muir. But I deal with the context of who he is.”

ALASTAIR Johnston walked into Ibrox at 8.55am yesterday, briefcase in hand and interim financial figures already released to the stock exchange, to begin another uncertain working day as the chairman of Rangers Football Club. Johnston’s a pretty languid and unflappable fellow at the best of times, which is just as well given the various troubling issues swirling around his beleaguered club at the moment.

Soon he was up the famous marble staircase and settling into an armchair in The Members’ Lounge. For over 40 minutes he then offered a frank briefing on the Craig Whyte takeover, the desperate need for investment in the playing squad, the club’s headaches over ongoing tax disputes, its strained relationship with Lloyds Banking Group and the deep unease over fellow director Donald Muir’s reason for being on the board.

The mood was relaxed and matter-of-fact, but Johnston knows he is in town at an enormously important period in Rangers’ history. His hope is that by the time he flies back to his base in Cleveland, Ohio, next week, he is the chairman of a club under new ownership.

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