Rangers' administrators have admitted that there is 'no realistic prospect' of the club securing a licence to compete in Europe next season.
Administrators rule out continental competition next term
Rangers' administrators have admitted that there is 'no realistic prospect' of the club securing a licence to compete in European competition next season.
Joint administrator Paul Clark has vowed to seek special dispensation from the authorities - they must apply to the Scottish Football Association, who use UEFA rules to determine whether licences are issued.
But he added that the stewardship of Craig Whyte had left Rangers with almost no chance of meeting the necessary criteria before the March 31 deadline.
"As regards the club playing in European competitions next season, there is no realistic prospect of the club being able to fulfil its obligations prior to the March 31 deadline set by UEFA," Clark said in a statement.
Perilous
"There are four main reasons for this and they lie in the stewardship of the club prior to going into administration. First, as we have stated from the outset, the likelihood of the club being able to emerge successfully from administration before this deadline as indicated by the chairman was, at best optimistic given the perilous financial situation at the club at the time of insolvency.
"Second, the company accounts cannot realistically be signed off by auditors in a manner that would meet the criteria required by the footballing authorities. Even if the audited financial statements are issued prior to the end of March 2012 we would expect them to be qualified by the auditors such that under UEFA requirements the club will have to satisfy a going concern test confirming how it will continue to be funded until the end of next season. Without knowing who will be the owner of the club at 31 March, it is impossible to provide suitable comfort in this respect.
"Thirdly under UEFA regulations the club must have paid or come to a satisfactory settlement with all social taxes that were outstanding at 31 December 2011. We estimate those social taxes (being PAYE and NIC) to be at least £5m. We cannot now see a scenario where those taxes will have been paid or compromised to the satisfaction of HMRC by the end of March 2012.
"The final major hurdle is that the club must have paid or compromised all of its outstanding "Football Creditors" prior to the deadline of 31 March 2012. That issue is again extremely unlikely.
"As administrators, we will make every effort to seek dispensation from the footballing authorities given the extraordinary circumstances in which the club has been placed."
Speculation
Clark also responded to claims from Rangers director Dave King that the club could be facing liquidation after being placed in administration.
He added: "There has, perhaps inevitably, been speculation about Rangers Football Club facing liquidation. As we have stated previously, we remain very confident that Rangers will not cease to exist and the team will continue to play at Ibrox.
"If a Company Voluntary Arrangement is not possible for any particular reason, any buyer of the club and its assets would complete that purchase through a sale by the administrators allowing the Football Club to continue to operate with the old company then being placed into liquidation prior to dissolution.
"We are, however, doing our best to ensure the company trades viably during administration and this will require a rigorous cost-cutting programme. Our preferred option remains to reach a point where a Company Voluntary Arrangement is reached and the club can emerge from administration as a viable business within its existing corporate shell. As stated there is a possibility that if a new buyer is identified a financial case may be made to sell the business and assets of the old company, but that is not our preferred approach at this time.
"We are aware of the statement from Mr King. We note his comments regarding the Ticketus arrangements but as this issue is subject to on-going discussion and examination, it would be inappropriate for us to comment further."
