By Paul Nicholson
May 13 – Anyone who thought Mike Ashley was going to take losing grip of his control of Scottish giant Rangers lieing down was mistaken. Ashley now wants another extraordinary general meeting, his £5 million loan back, and a full explanation of why the company was de-listed from the stock exchange.
Ashley’s demands plunge the club back into boardroom discomfort at a time when the team are battling in the promotion play-offs in a bid to return to the Scottish Premier League.
The English businessman holds a 9% shareholding in the club but has built up a much more powerful influence via his loans and control of the club’s merchandising company. By calling for another extraordinary general meeting he hope to pressure the board to make this happen
Ashley is demanding a full explanation of why Rangers were de-listed from the stock exchange – an event that was precipitated by the change of board at the last egm. Rangers’ nominated advisor had resigned prior to the board meeting and a new advisor could not be found within the deadline required for the company to remain listed.
In a letter, a copy of which has been received by the Scottish Daily Record newspaper, Ashley says that if his £5 million loan (made via Sports Direct) is repaid then he will hand back the securities he has for the loan that include the Rangers brands (owned by the Rangers Football Club), the Murray Park training ground, the Albion Street car park, and Edmiston House.
On repayment of the money to Sports Direct, Ashley would also hand back 26% of the shares Sports Direct holds in Rangers’ retailing company, returning to a 49% shareholding rather than the current 76%. Sports Direct would continue to run the profit-making retailing operation.
How the current Rangers’ board would fund any release of Ashley’s debt remains to be seen. They are unable to borrow against the Ibrox Stadium as this is a condition of the Sports Direct loan.
This leaves them in the most likely position of having to put their money where their mouths are – if they have that kind of money. And there is still the issue to resolve of finding a public marketplace where shareholders can trade their stock.
Ashley may have been muted in the boardroom coup at Rangers that saw his close associates replaced, but he has been very far from castrated.
So what is Ashley’s motivation at this stage – money back or control of Rangers? It looks most likely that he is trying to protect his loan by getting it repaid by a board which he obviously believes has no respect or commitment to his interests or money. He then has the issue of value in the shares he purchased – as do all the other shareholders. At the same time he remains in effective control of the merchandising business and hence is an added stakeholder in the club.
Ashley may have lost his battle for control of the board of the club, but he hasn’t lost the war and still holds a number of key positions. And he knows it and is prepared to leverage them. The Rangers board know this as well – now more than ever.
At the time of writing no statement had been made by the Rangers board.
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