When will Sevco go into administration?

Despite achieving 9-in-a-row at the weekend, under a board full of real Rainjurs men, all is far from well with the runaway leaders of the Scottish Championship.

Over the last few days there has been more and more online speculation about just when the season ticket money will run out forcing the company into administration.

The League Cup exit to St Johnstone and Charles Green’s legal costs are two new negative elements to factor in with the prospects of trading through to Christmas looking remote.

While the gullible support shout names outside Glasgow Sheriff Court and celebrate Waggers latest penalty the real story lies off the park for a company that has never been close to living within their means.

The £22m raised by the 2012 share issue was virtually gone by the time that the 2014 League One championship was celebrated making finances extremely challenging.

In October of last year a share issue raised £3m, in December £3m was borrowed from Sports Direct with £5m from the same source the following month used to pay back the December loan.

With regime change in March bringing in an era of transparency and accountability further unsecured loans totaling £4.5m saw the club through to the end of the season.

The audited accounts to 30 June 2015 have still to be published with the new regime still to find a nominated adviser or market to trade shares due to the toxic nature of chairman Dave King.

Since formation in 2012 the company has had annual expenditure of over £30m meaning that the money brought in by 33,000 season ticket sales doesn’t cover six months of spending.

Barcabhoy of the Scottish Football Monitor has seemed more informed that most throughout the saga and provided an update this morning on how things currently stand.

Picking out some highlights he explained: “The business will need substantial loans over the remainder of this financial year, and remember last year’s cash inflow included circa £800,000 from the current management team for Lewis McLeod.

“Selling Tavernier or Waghorn would indicate Kingco don’t have the resource they claim, and that would be a risk too far for them- so who lends the money?

“Presumably Sports Direct are not an option to cover any of the shortfall this year, and as none of the usual suspects like Kennedy & McCall have publicly offered to provide loans, it would appear that the only options are King , Letham, Taylor and Park.

“Do they have the resources and are they prepared to take what is a substantial risk? I wouldn’t criticise anyone for having doubts. I seriously doubt any of these four are what would be described as Ultra High Net Worth individuals, but maybe they are .

“Even so , financially it’s a huge risk to put any more money into this. There is uncertainty on so many fronts, that investment / loan red flags are jumping out all over the place.

“Criticism of course can be fairly aimed at King . He came to a position of control by undermining the financial position of the previous board , and by making multiple promises of £10’s of millions of investment. He has no moral escape hatch. Anyone who makes such promises to a club he professes to love has no excuse , no matter what turns up subsequently.

“All of this is before we factor in the potentially devastating effect of Greens legal fees and the court cases involving most of the key figures involved in founding RIFC.”

Barcabhoy concluded: “Anyone on either side of the phony PR war is guessing at outcomes . The paid for Kingco spinners don’t know and are briefing furiously that it will all work out, and the doom-sayers don’t know, because the truth is with so many uncertainties , nobody knows. Which for a business in dire need of funds is the second worst position to be in.

“The worst is needing an amount of cash that is known but is unable to be raised. There is of course the possibility that even the minimum needed and known about , is not readily available. However King has personally assured us the business is fully funded, so I’m sure that’s not the case . Might carry a bit more weight though if someone not prone to telling so many lies came out and said it.
Over to you Mr Robertson.”

The only certainty is that when administration arrives the various supporter groups will come out with the favoured line used about Mr Whyte and Mr Green- ‘but nobody told us’ followed by dire warnings of the consequences for other clubs about a world without a team in blue playing at Ibrox.

Having survived the 2012 Armageddon a proper administration- not staged by Duff & Phelps- will have little adverse impact on Scottish football. Once you’ve seen one Armageddon you’ve seen them all.

When will it happen? The turkeys have got a better chance of surviving till Christmas, if Mr Green gets his legal costs ring fenced they could be in administration before Halloween.