A £5m loan from  Rangers' biggest single shareholder and former chairman Dave King has cost the club £832,000 in interest payments, it has been revealed.

The loan from the 66-year-old South Africa-based executive, who stood down last year, came with an interest rate of 16%.

Past loans agreed with directors of the club including Mr King were set up with the intention of converting them to shares in the club at a later date.

The South Africa-based businessman, was one of the leading figures in taking control of Rangers from Sport Direct’s Mike Ashley in 2015, when Rangers were in the Championship, the second tier of Scottish football, following the effects financial implosion of the club in 2012.

Details of the loan, which was agreed two years ago,  emerged as the club posted operating losses of £23.5m in their annual report for the latest financial year, ending in June 2021.

Rangers also confirmed the club now has a loan facility with a major high street bank for the first time since the regime change in 2015.

Executives state that the loan from Mr King has been repaid along with the interest payments.

A statement on its funding structure states: "During the course of the year, the club was approached with a number of investment proposals, notably from the private equity and family office sphere. We are extremely fortunate to have an investor group that is able and willing to match or better the indicative terms from such groups whilst retaining the ownership in the hands of dedicated Rangers supporters.

"Thus, the club has secured a formal, long term, loan facility which represents a key milestone in our progress towards a normalised capital structure.

"This has been progressed further since 30th June with additional investment from our investor base to support the funding needs of the club, including the repayment of Dave King’s £5m loan plus interest of £832k on that loan.

"Replacing this high interest, short-term borrowing with a long term, lower coupon structured facility provides significant benefit for the club.

The Herald:

"Complementing the above we are also delighted to have concluded a bank term loan facility which represents our first such facility with a major UK high street lender since the regime change in 2015.

"Thus, we have significantly enhanced both debt and equity structures, including conversion of over £26m of shareholder loans to equity and supplemented by our successful Tifosy share issue."

When Dave King stepped down as chairman of Rangers at the end of 2019 after four-and-a-half years at the helm – it left questions over how the club will be funded in the future - as his £5m loan emerged.

At the Rangers’ AGM, in that year, Mr King revealed issues with his own attempts to invest in it, blaming South African authorities, while announcing there was “no longer” a need to continue with what he described as an “ad hoc funding approach”.

Describing his time as chairman as the “biggest privilege” of his professional life, he also insisted the club was “the best financially and operationally that it’s been” since he first became involved 20 years ago.

The Rangers International Football Club plc was predicted at that point to require £10 million by way of “debt or equity funding” by the end of this season while announcing an annual loss then of £11.3m.

He said that in three years they had invested more than £30m in the playing squad and that was “by far” the largest contributor to the club’s losses.

At that point the Castlemilk-born Rangers fan’s Laird Investments company was quoted as providing loan facilities to meet a predicted shortfall in funding for that financial year “and further amounts that may be required”.

It agreed to provide a £5m facility to October 2021.

At that point a report from Mr King, who retains a 16% stake in Rangers, admitted that “uncertainty over the level of additional funds that will be required and a lack of a binding debt facility indicate that a material uncertainty exists which may cast doubt over the group’s ability to continue as a going concern...”

Rangers’ auditors, Campbell Dallas Audit Services, echoed this, saying the risk of key cash flows not being achieved as forecast, along with the absence of a binding debt facility for any shortfalls, “indicate that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern”.

However, Mr King also said that his report was prepared on a “going concern” basis and that the board believed there is a “reasonable expectation” it will “at all times” have adequate resources to continue in operation for the foreseeable future.

The Rangers board in its latest overview states: "When the current board and investors wrestled back control of our club in 2015, it saw before it a 10-year recovery project. Today, we consider that prognosis to be accurate."