Scottish Championship side Rangers shareholder Mike Ashley has "strengthened his grasp on the money streams" entering the club after the cash-strapped Rangers board agreed to a £10M ($15M) "emergency loan deal" with Sports Direct, the EPL Newcastle United owner's retail business, according to Mark Cue of the LONDON TIMES. The loan will be secured against Murray Park, Edmiston House, Albion Car Park, and the club's registered trademarks -- but not its stadium, Ibrox, which is "specifically excluded and remains in the full ownership of the club." Without the injection of "fresh funding, Rangers would not have been able to cover their wage bill, which is due to be paid on Thursday." The loan will be split in to two tranches. The first £5M ($7.6M) is available immediately for "working capital purposes" and also to repay a loan the Scottish club accepted from MASH Holdings, which is also owned by Ashley, in October. The second tranche of £5M, which is repayable five years after drawdown, will be used, if required, for "working capital purposes" and is "subject to due diligence by Sports Direct prior to draw down" (LONDON TIMES, 1/27). REUTERS' Neil Maidment reported as part of the deal a 26% stake in Rangers' retail business -- a joint venture with Sports Direct -- will be given to the sporting goods retailer. Rangers said that the stake will be "transferred back to Rangers when the facility is repaid." Tuesday's deal through Sports Direct, which will also see the retailer "benefit from any shirt sponsorship deals" from the '17-18 season for the duration of the credit facility, will increase Ashley's influence at the Glasgow side "without raising his own stake in the club" (REUTERS, 1/27).
ASHLEY'S GRIP TIGHTENS: In London, Roger Blitz reported the terms give Ashley the "right to nominate another two directors to the Rangers board." His allies CEO Derek Llambias and Finance Dir Barry Leach were appointed to the board as a condition of Ashley's October loan. All conditions will cease when the £5M tranche is repaid. The second £5M tranche is repayable five years after being drawn down (FINANCIAL TIMES, 1/27).
THREE BEARS DENIED: The PA reported the move "spells the end of attempts by the Three Bears group -- wealthy
fans Douglas Park, George Letham and George Taylor -- to have their own
loan offer accepted." It was their promise to "match Ashley's deal while demanding Ibrox
remained unsecured" that forced Ashley to drop the
stadium from the terms of his agreement (PA, 1/27). STV's Matt Coyle reported the statement from Rangers board highlighted the club's "perilous" financial condition has been "exacerbated by lower than expected match attendances" in recent months. The statement said, "The Company's financial condition has been perilous for a number of months exacerbated by lower than expected match attendances. The directors have implemented a cost cutting program with which they have made significant progress. There is however an immediate need for a substantial injection of capital, and the directors have considered a number of options" (STV, 1/27).
