The revered Three Bears consortium have refused to pay off Mike Ashley’s £5m Sevco loan.
At the end of January the Three Bears were prepared to invest £6.5m, rising to £10m, but when it came to the crunch they have coughed up just £1.5m for the company that runs the football club.
With major doubts over Dave King’s suitability to be a director and no sign of a NOMAD 19 days after share trading was suspended the company remains dependent on a Sports Direct loan that could be recalled at any time.
Mr King has returned to South Africa after his flying visit to Glasgow earlier this month and has still to detail how he intends plugging the £10m annual losses that the company is suffering.
In January a statement from the Three Bears read: “At one stage during the negotiations we indicated that we could increase our funding package to £10m to match the SD facility and indeed provided proof of funds in excess of this amount.
“However after the EGM was called we felt that agreeing an excessive long-term loan package with a Board who may be removed in six weeks was not appropriate.
“We were subsequently advised by Derek Llambias that our funding offer would be difficult for the Board to accept if we did not provide irrevocable undertakings to vote against EGM resolutions to remove certain existing board members. We felt this was completely inappropriate and advised that our current funding offer was not affected by the EGM process.”
At a meeting with the Rangers Fans Board, suspended Finance chief Barry Leach was reported to said that he felt that the Three Bears would have ‘s**t themselves’ if the offer had been accepted.
This afternoon an announcement to the Alternative Investment Market said: “The company is pleased to announce that it has entered into loan agreements with Douglas Park, George Letham and George Taylor for facilities totalling £1.5m.
“The proceeds of the loans are available generally for the purposes of the company and will be used for working capital.
“The loans are being made available until 31 December 2015 which will provide the company with time to deliver a longer term funding solution. No interest or fees are to be charged in respect of the facilities and the loans are being provided on an unsecured basis.”
While Mr Park has accepted a blazer neither Mr Letham or Mr Taylor have made any public comment since Mr King swept to power. Fellow directors Paul Murray and John Gilligan have still to announce their own investment intentions.
Mr Ashley loaned the club £5m in January with £3m of that used to pay off a previous loan. At the same time they announced that a further £5m loan facility would be available provided due diligence was carried out to Sports Direct’s satisfaction. That hasn’t been possible.
Mr King has promised to match the investment of others but has yet to announce a £1.5m interest free loan of his own.
With only match day income to keep the company afloat and Mr Ashley’s £5m loan still unpaid the company remains in a critical financial position.