Crisis club Sevco have launched a desperate bid to raise £4m to keep the light on at Ibrox.
Twenty months after selling shares at 70p the troubled club have this morning announced the sale of 19,864,918 shares at just 20 pence each.
If the offer is taken up by existing shareholders, which is highly unlikely, it will raise just under £4m before costs are taken off.
With losses of more than £1m a month it’s unlikely that the money from the share issue will do anything other than delay the inevitable announcement that the club is in administration.
This morning’s AIM announcement read: “Further to the announcements on 25 April and 6 August 2014, the Board of Rangers is pleased to announce an Open Offer of up to 19,864,918 new Ordinary Shares at 20p each (“New Ordinary Shares”) to raise up to GBP3.97m before expenses. Qualifying Shareholders are entitled to subscribe for New Ordinary Shares on the basis of 0.30185 New Ordinary Shares for each existing Ordinary Share in the Company held on the Record Date.
“In addition Qualifying Shareholders subscribing for their full entitlement under the Open Offer may also request additional New Ordinary Shares through the Excess Application Facility. The Open Offer is subject to an aggregate minimum subscription of 15,000,000 New Ordinary Shares.
“The Issue Price of 20 pence per New Ordinary Share represents a discount of approximately 21.6 per cent. to the closing middle market price of 25.5 pence for each existing Ordinary Share in the Company on 28 August 2014.”
Tellingly the full statement added: “If the aggregate level of subscription is less than 15,000,000 New Ordinary Shares (£3million) the Open Offer will not proceed and subscription monies will be returned to applicants. Should this occur, the Company will be unable to pay its creditors as they fall due and the future of the Company will be uncertain; The Directors will immediately have to seek emergency financing which may or may not be available.”
The announcement of the new plea for cash comes on the back of plunging season ticket sales after credit card facilities were withdrawn to supporters.
On September 1 the club has two loans to repay totalling £1.5m otherwise they face losing the hallowed Albion Car Park and Edmiston House office block.
The financing of the club has been a cause for concern for shareholders since chief executive Mr Graham Wallace, who used to work for Manchester City, asked players for conceptual discussions over a 10% pay cut in January.
That was followed by the £1.5m emergency loans secured in February which are now due for repayment.
On the pitch Sevco trail league leaders Hearts by three points with Ally McCoist hoping to add a few more experienced players to the wage bill before the transfer window closes on Monday.