Sevco require £8m to stay afloat. That stark figure emerged from the club’s accounts for the year to 30 June 2014 with the majority of that figure required in January.
Two years of mismanagement and overspending have put the League One winners on death row with only the arrival of a sugar daddy likely to see them through to the end of the season.
With turnover of £25m and losses of £8.3m the basic arithmetic tells you that Armageddon II is lurking around the corner with auditors Deloitte’s warning: “ 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.”
A fire sale of players is unlikely to raise more than £2m when the January transfer window opens with a share issue, requiring existing shareholders to agree to dilute their shareholding and throw good money after bad, needing the approval of 75% of shareholders at the December 22 AGM.
Announcing the devastating figures chairman David Somers said: “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.”
Further complicating the issue of raising fresh donations is the ongoing police inquiry into the 2011 sale of Rangers (IL) to Craig Whyte for £1.
Any dispute over the ownership of assets would prevent the club from borrowing against their assets, with no overdraft facility from Metro Bank it seems that it will take a miracle to keep Ally McCoist’s promotion bid from being torpedoed.
In the highly unlikely event of raising £8m Sevco will find themselves in a similar position in a year unless they can significantly cut costs or find ways of raising additional revenues.
With home crowds down by 15,000 per game and McCoist’s side trailing Hearts by nine points it seems that administration is a certainty with only the timing to be decided.