A KEY Rangers board member has warned that the club cannot continue to run on  loans indefinitely - as chairman Dave King made a court-ordered £8m offer to buy out most of the shareholders.

John Bennett, chairman of the club's independent directors, made the comments while advising shareholders over the pros and cons of taking part in the offer.

When the club announced pre-tax losses had more than doubled for a second consecutive year to £14.3million last year, the board said Mr King's New Oasis Asset Limited would provide additional loans as necessary.

The board said in October that the latest forecasts indicate at least £4.6m was required for the rest of this season and a further £3m was needed for 2019/20.

However, the independent auditor from Campbell Dallas accepted a failure to secure the additional funds would result "in the existence of a material uncertainty which may cast significant doubt as to the group's ability to continue as a going concern".

The Herald:

Mr Bennett in written advice on the financial prospects of the club over Mr King's offer said: "Rangers International Football Club plc is loss making and is supported by loans from the directors and other key shareholders. This cannot continue indefinitely."

He said financial support was partly addressed by September's £12m share issue and there would be two further share issues.

But he added: "Going forward it will become necessary to resolve the flow of losses incurred by the company. The independent Directors believe this is achievable subject to the two share issues proceeding as planned."

READ MORE: Confirmed: Rangers chairman Dave King makes court-ordered £8m club shares bid

Mr Bennett said the independent directors believe there is still the possibility of "significant upside" in the club's trading and prospects.

The club were still hampered by some unspecified "legacy issues" entered into before Mr King and his Three Bears group took over the running of the club from a board said to be linked to Sports Direct supremo Mike Ashley.

And Mr Bennett said it may be another two or three years before these are completely resolved.

Mr King was ordered to make an offer for the remainder of the club shares by the Takeover Panel financial watchdog after it ruled the South Africa-based businessman had acted “in concert” with fellow investors when they took control of the club in 2015.

After a protracted court case, Mr King finally agreed in December that he would make the offer and details of the bid were then posted on the Rangers website on Friday afternoon, just hours before the deadline.

The Herald:

Mr Bennett said the offer provides an opportunity for shareholders to sell their shares in full for cash without dealing costs, at a time when the club is no longer listed on a recognised stock exchange and there "might be limited opportunities" to do future deals.

In reasons not to take up the share offering, he said: "There will be shareholders who take the view that RIFC and Rangers Football Club should never again be controlled by a single party and that the best protection for Rangers Football Club is for there to be a multiplicity of shareholders, including a strong holding amongst Rangers supporters.

"The independent directors recognise that many shareholders will have acquired their shareholding in order to support Rangers Football Club and the independent directors continue to believe this is important and that shareholders who share this prime motivation should reject the offer.

"The independent directors believe that there is still the possibility of significant upside in the RIFC Group’s trading and prospects.

"Football is not an investment for the cautious investor and there needs to be a clear understanding that, in addition to the usual business risk faced by every company, sporting risk and reward is also a significant factor for the RIFC Group’s prospects.

"The independent directors are comfortable with the balance between such risks and the potential rewards with regard to their own shareholdings in RIFC but such decisions are for each shareholder to make after their own analysis."