Thursday, 3 May 2012

Rangers likely to be sold to Bill Miller

It is understood that Bill Miller the American trucking millionaire has removed his condition that the Scottish football authorities  are not to issue more penalties against the club.  So now the bid is unconditional and according to the administrators at Duff and Phelps it was substantially higher than the bid fronted by Paul Murray.  So it looks like a go.

So what happens to all the debt?

The plan that is mooted is that the assets of Rangers would be moved to a new company "newco" and the "oldco" would be left with the debt.  The "oldco" would then strike a deal with its creditors to pay off a proportion of its debts via a company voluntary arrangement or CVA.  This technique is what is known as a hive out.   In essence though the "newco" would pay off the creditors of the "oldco" as it would generate the cash needed.

It is intended that the companies will reunite at a later stage. It is crucial that the oldco's CVA does not fail as that would mean that liquidation could still occur. 

The new Rangers might struggle to assemble a squad and there will be some regulatory hurdles to overcome in order to play in other competitions as UEFA says that a club must have been a member of an association for at least 3 years.

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