Rangers need another £8m – What will this mean for Ashley and NUFC?
Rangers have announced losses of over £8m for last season but at the same time revealed that they need a further £8m to be pumped into the club in the next 12 months, just to keep trading.
The £8.3m loss was an improvement on the £14.4m loss of the previous season but no surprise that we saw a wave of redundancies once Mike Ashley gave the club an emergency loan, with Ashley insisting on two nominees on the board, one of which is Derek Llambias.
“Without taking account of the possibility for refinancing the £3million short term loan facility falling due for repayment in April 2015 or of the impact of any cost reduction measures or of any other potential sources of revenue, such as player transfer or loan fees, the forecast identifies that the group will require up to £8million by way of debt or equity finance within the next 12 months.
“The forecast indicates that these significant further funds will be required in early 2015, the first tranche of which being required in January 2015, to meet day to day working capital requirements.”
Deloitte are the Glasgow club’s independent auditor and they added;
“The group requires additional funding to continue to meet its liabilities as they fall due.
“The group has made key assumptions in relation to its ability to secure further funding in addition to the timing and value of season ticket income, increases in matchday income and sponsorship, the timing and value of dividends and further cost reductions.
“These conditions around the need to secure further funding, along with the details provided in note 1 of the financial statements, indicate the existence of a material uncertainty which may cast significant doubt over the group’s ability to continue as a going concern and therefore that the group may be unable to realise its assets and discharge its liabilities in the normal course of business.”
What is perhaps the most scary thing is that Rangers also stated that they expect promotion this season and the subsequent extra money that will bring in. Currently nine points behind Hearts for the only automatic promotion slot, they appear very likely to have to go through the sudden death process of the play-offs.
Failure to succeed in that process just must not bear thinking about when it comes to the finances.
Yesterday brought news that UEFA had confirmed that due to Mike Ashley’s involvement at Rangers and Newcastle, both clubs couldn’t compete in European competition at the same time, unless he status quo changes.
What Mike Ashley chooses to do next will surely tell us a lot about his longer term intentions at Rangers. With the first extra finance needed in January, if Ashley produces more funds to help get them stay afloat, then clearly you would think he is there for the long haul.
How that impacts on Newcastle United and the fans will be another matter.
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