AUDITORS have raised a ‘going concern’ warning over Rangers FC as it emerged the club has accumulated nearly £80m in losses since the Dave King regime change six years ago.

The ‘material uncertainty’ warning came as the club confirmed a loan facility with an unidentified high street bank for the first time since Mr King wrested control of the club from Sports Direct supremo and former Newcastle United owner Mike Ashley.

The concern comes because the precise level of funding required for the club going forward was not clear.

It has emerged that the club has posted £77.25m in losses cumulatively over the years since Mr King and his Three Bears group of investors wrested control of Rangers from Sport Direct’s Mike Ashley in 2015.


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That came three years after the club’s business under businessman Craig Whyte’s stewardship went into administration nine months after he took a majority shareholding for £1 while agreeing to take on millions in debt.

In the latest financial year, ending in June 2021, the club registered a loss of £24.15m - the highest annual deficit since businessman Charles Green and his Sevco consortium, bought the assets of the club business in liquidation nine years ago for £5.5m. That is a rise of £6.6m on the previous year.

Last year’s £17.4m loss had itself gone up £6.3m from the previous year amid what the club called the “economic storm” of the Covid-19 crisis.

The only year since the club’s liquidated business was bought by Sevco, that it turned a profit was in the 13 months to June 2013, when it was £1.192m in the black. Three years later the club’s losses were at £3.3m.

According to a Rangers International Football Club plc (RIFC) board statement it was forecast that the club would require £7.5m by way of debt or equity funding by the end of season 2021/22 in order to meet its liabilities as they fall due with a further funding of £0.4m required by the end of season 2022/23.

The first tranche of funding is required from investors before the end of this year.

But directors say the final amount required is dependent on future football performance, European football participation and player sales amongst other factors.

The club has already sanctioned a seven-year £5.25m loan facility provided by a lending group of shareholders including club vice chairman John Bennett and non-executive directors Julian Wolhardt and Alastair Johnston.

Interest was being charged at 6% per year from July 31 and the cash injection is secured against the club's Edmiston House, formerly home to Rangers FC's Social Club and ticket office.

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Julian Wolhardt

An agreement has been reached with club chairman Douglas Park and Mr Bennett where they will provide additional loan facilities as necessary to meet shortfalls.

In the club's last financial year, some £21m in loans was pumped in by investors which was used as working capital.

The club also received £3.2m of public money allocated by Scottish Ministers, as part of the Premier Division Support Fund on an interest free basis repayable over a period of 20 years.

The club believes the loan is considered to be "below market rate".

The interest-free loans were given to 11 Premiership clubs last season to help mitigate the financial impact of matches being played behind closed doors.

And the Ibrox club topped the table when it came to clubs claiming emergency covid loans from the Scottish Government.

But the club has also converted some £26m of shareholder loans into shares in the club while in the process diluting the value to others holding equity.

As of June, 2021, there were loans with investors amounting to £10.3 million and other commercial loans of £1.9 million, while the company also has lease agreements totalling £1.7 million.

The auditors have stated that the financial situation means there is a going concern uncertainty - something acknowledged by the board of the Scottish Premiership champions.

Auditor Greig McKnight for Azets Audit Services said there was a "material uncertainty related to going concern" saying the precise level of funding required going forward was uncertain.

The auditor said that in order to continue operations for the next 12 months RIFC is dependent upon raising additional finance to cover projected cash shortfalls in season 2021/22 and 2022/23.

"The precise level of funding required is uncertain as it is inherently dependent on a number of key variables...," he said.

"The risk that key cash flows are not 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."

Details of the club's financial position came as Steven Gerrard departed the Ibrox club to become the manager of Aston Villa in the English Premier League having guided the club to a 55th Scottish Premiership title last season, finishing the league campaign undefeated.#HeraldScotland: Steven Gerrard

One fans group source said there remains cautious optimism about the future despite the club's financial position and Mr Gerrard's move.

"If we have people in the boardroom willing to put in the money, then I would hope that we would be okay. But I do wonder what will happen if that money is not there for any reason," he said. "We don't have the backing of any billionaire.

"What the supporters want is success on the pitch, and that has been delivered, but there is always that nagging question in the back of the mind about the price paid for success, that led the club into administration last time round. I just hope it never gets to that stage.

It comes as concern surfaced that a £5m loan from former chairman, Mr King and still Rangers biggest single shareholder has cost the club £832,000 in interest payments.

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 interest free with the intention of converting them to shares in the club at a later date. It came after Mr Ashley, the former Newcastle United supremo, who in 2015 had a near 9% share in Rangers, gave the club money to help them remain solvent - but it came with a string of conditions - which also included the right to shares in the Rangers Retail merchandise company, which meant he had control.

Mr King said at the time that it was an "expensive so-called ‘interest-free’ loan" and that that too much of the profits" from the mechandising were are "going to parties outside the club".

After the Three Bears took control in 2015, Mr King said he had paid back a £5m emergency loan in full to Mr Ashley's Sports Direct after it emerged security over the funding was being held over Murray Park, Albion car park as well as the club's precious trademarks including the famous RFC Scroll crest and the Ready logo.

Mr King was one of the leading figures in the Three Bears takeover, when Rangers were in the Championship, the second tier of Scottish football, following the effects financial implosion of the club in 2012.

Before he took charge at Rangers Mr King said he was prepared to stump up the £50m needed to compete with Celtic at the top of Scottish football and said: "I actually believe whatever I invest in Rangers I will never get back. But I am happy to do it."

Mr King's loan, which was agreed two years ago with his South African-based Laird Investments (Proprietary) Limited, was repaid last month along with the interest payments.

The club said in announcing the repayment of the loan: "Replacing this high interest, short-term borrowing with a long term, lower coupon structured facility provides significant benefit for the club."

When Mr 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.

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Dave King

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”.

Last week Mr King moved to set the record straight after "confusion" over what he called the "club's recent incorrect statement" that a loan plus interest was repaid to 'Dave King' which came after he said he was committed to any funding being on an unsecured and interest free basis.

He said there were concerns that it appeared his loan had previously been unreported and had somehow compromised Rangers present financial position.

He made clear that the original loan was provided by his Laird "a company in my family trust structure" shortly before he stepped down as Rangers chairman and had to be approved by South African authorities.

And he said that the South African authorities would not allow the loan to be made without it attracting a market-related interest rate.

"I explained at the [2019] AGM that my regret at interest being paid was that it went completely against the undertakings given by me and my fellow directors (at regime change) not to take director fees and not to receive interest or take security for loans provided to the club," he said.

"The hardened position of the SA authorities to investment in the club reinforced the timing of my decision to step down.

"I had achieved my personal objective of removing the club from its state of crisis and it had become in the best interest of the club to be guided by individuals in the UK who, I thought, were capable of taking the club forward in a normalised manner (Covid had not yet happened) and who were willing and able to continue to provide any funds that might be required on an unsecured and interest free basis- and thereby honouring the commitment that we collectively made to supporters and shareholders.

"At the club’s request, the Laird loan that I disclosed was only payable after two years...

"The payment, including agreed interest, had been recognized in all cash forecasting throughout the prior two years and consequently had no impact whatsoever on the club’s anticipated financial position."

He said he was approached to consider an extension of the loan period to assist with the future funding of the club but said that it was too late to get approval from the South African authorities to extend the upcoming due date.

He said he was happy to give a new loan, but that it would have to be on an interest basis "as required by the authorities". 

But he said the club did not take him up on his offer.


The present chairman, Mr Park has said the board acknowledged the current 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 Rangers International Football Club plc's ability to continue as a going concern".

But he has said that having secured the offer of further loan funding the directors believed that there is a "reasonable expectation" that the company will at all times have adequate resources to continue in operational existence for the foreseeable future.

Accordingly the board continued to adopt a "going concern basis".

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."