Heart Of Midlothian Reports Financial Loss, Groups Ready Bid For Club
A Lithuanian court began bankruptcy proceedings against the bank of Scottish Premier League Heart of Midlothian Owner Vladimir Romanov -- Ukio Bankas AB -- "at the request of the central bank, which shut the Kaunas-based lender in February because of risky loans to related parties," according to Bryan Bradley of BLOOMBERG. Kaunas District Court "also issued a decree naming the firm Valnetas UAB as Ukio’s bankruptcy administrator." The decisions "may be appealed within 10 days." The permanent bankruptcy administrator "will determine how and when to seek recovery of Ukio’s assets," which include Hearts "as well as the team’s stadium in Edinburgh" (BLOOMBERG, 5/2). In Edinburgh, Gavin McCafferty wrote Hearts have reported a loss of £1.65M ($2.6M) last season -- "almost entirely due to a historic tax liability" -- but increased their turnover by almost £2M ($3.1M). The club, "who face an anxious wait to see how Lithuanian insolvency practitioners will act in relation to their debt to bankrupt Ukio Bankas," announced its financial figures for the year through June 30. In a statement, Hearts revealed turnover had gone up to £8.7M ($13.5M) from £6.9M ($10.7M) the previous season, with their debt standing at £24.7M ($38M) after what they termed a "modest increase." They put this improvement "down to their participation in the Europa League qualifying rounds, where they faced Tottenham, and their William Hill Scottish Cup triumph" (SCOTSMAN, 5/4).
LENDING SUPPORT: Also in Edinburgh, David O'Leary reported Hearts supporters’ groups are “readying their bid” in the wake of bankruptcy proceedings commencing. MP Ian Murray, who is chair of a working group comprised of several supporters’ bodies, "held a meeting at which plans to launch a take-over bid were firmed up." Football finance experts said that the move "was likely to be a positive one for the club, and could lead to a swift resolution of the fans’ takeover bid." The working group headed up by Murray "consists of" the Federation of Hearts Supporters’ Clubs, the Foundation of Hearts, Heart of Midlothian Shareholders’ Association, Heart of Midlothian Supporters’ Trust, Hearts Youth Development Committee and Save our Hearts. Leading football finance expert and Ernst & Young partner Neil Patey believes that Lithuanian administrator Valnetas may now bring about “a swifter resolution” by selling Hearts and Tynecastle as a going concern -- to the delight of fans’ groups. Patey said, "This scenario would of course be in the best interests of Hearts, the fans and any would-be buyers for the club such as the Foundation of Hearts" (SCOTSMAN, 5/3).
READYING FOR RELEGATION: In Glasgow, Robert Martin reported Hearts are poised to avoid SPL relegation this season -- "even if they enter administration before the end of May." Bank of Lithuania administrators "have the power to call in" £15M ($23M) debt owed by the Tynecastle club. By doing so immediately, they "would trigger a 17-point deduction that would instantly put Hearts six points behind current bottom club Dundee." However, that is "unlikely to happen while the case is still being debated in the Lithuanian courts" (SCOTTISH SUN, 5/3). In Glasgow, Gavin Berry reported Hearts Manager Gary Locke inisisted that he is "ready for the worst if Hearts go bust this month and are relegated." He added that it "won't affect his summer rebuilding plans and is convinced signing targets will still want to join the club" (DAILY RECORD, 5/3).