Wednesday 28 January 2015 09:44, UK
The Three Bears consortium have criticised Rangers' decision to shun their offer in favour of a £10m loan deal from Sports Direct, a company owned by Newcastle owner Mike Ashley.
The consortium, comprising of wealthy supporters Douglas Park, George Letham and George Taylor offered the cash-strapped Glasgow club a £6.5m loan but Ibrox directors opted for Sports Direct's offer of two £5m tranches, with chairman David Somers calling the move "a great deal."
In return for the loan, Sports Direct will be entitled to 26 per cent of all Rangers Retail Ltd, who will receive all of the cash generated from shirt sponsorship deals from 2017 until the loan is paid off.
The Three Bears have criticised the move and said in a statement: "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.
Security for the SD facility involves the club's registered trademarks and a floating charge over the club's assets. This is disadvantageous to the club compared to the security required under our offer.
'Uncertainty'
"The announcement from the Board suggests that the SD facility is interest free but the loss of revenue to the club from the transfer of 26% of the share capital in RRL and 50% of the shirt sponsorship proceeds from 2017/18 equates to an annual interest rate significantly higher than our offer and probably in double digits.
"Security for the SD facility involves the club's registered trademarks and a floating charge over the club's assets. This is disadvantageous to the club compared to the security required under our offer.
"It appears that the only measure by which the SD facility could be considered favourable to our offer is in respect of the quantum and duration of the second tranche of £5m but there appears to be some uncertainty as to whether this will actually be required and it is subject to further due diligence by SD.
"We fail to see how the SD facility can be described as better for the club than the funding offer we made. It isn't and should not have been accepted if the best interests of all the shareholders were considered. Acceptance of the SD facility will do nothing to repair relationships with the fans which is critical in improving the revenue streams of the club."
And Rangers Supporters Trust spokesman Chris Graham echoed the Three Bears' statement claiming the Sports Direct deal was the wrong one for Rangers.
"They have effectively chosen to take on £5m of debt rather than a financial package that would have been converted to equity at a later date," he said.
"They have also reduced the ability of the club to pay it back by reducing the revenue streams available to it."
