News - Economics / markets
Ticketus, the company backed by the Octopus Protected EIS scheme, has withdrawn from discussions with Blue Knights Consortium over a takeover of Glasgow Rangers FC.
The ticket exchange firm was working with Blue Knights with the view to bid to takeover the beleaguered football club but said it failed to finalise satisfactory terms in restructuring its ticket purchase programme that would protect its investors.
A statement from Ticketus said: "Our willingness to work with all interested bidders, and to try and be part of a solution for the club, was undertaken with the objective to agree terms that would satisfy both our investors' needs as well as being in the interests of the club, its fans and its creditors.
"Regrettably over the course of this week it became impossible to reconcile these interests with the proposals put forward by the Blue Knights as the terms of a deal became clearer."
Octopus Investments' exposure to Rangers came to light in February when the club announced it was going into administration. Octopus holds the £100m company Ticketus in its £500m Protected Enterprise Investment Scheme and used to hold it in its secure VCT, although the group confirmed this investment was closed last year.
The owner of Glasgow Rangers FC Craig Whyte admitted he used a £24m payment for future season ticket sales from Ticketus, to complete the takeover of the club by paying off an £18m debt to Lloyds Banking Group, according to reports.
Ticketus had paid the cash for tickets for the next three seasons' games but Rangers' administrators said the money could not be traced in the club accounts.
At the time, Whyte said: "The Ticketus deal was by far the best way to protect the club given the circumstances, in that they have no security over any assets. The only person at risk from the deal is me personally because I gave Ticketus personal and corporate guarantees underwriting their investment; the club and the fans are fully protected. In terms of exposure, I am personally on the line for £27.5m in guarantees and cash."
There are a number of likely outcomes involving Ticketus re-obtaining its cash. If there is a CVA (company voluntary agreement) outcome, Ticketus is one of the biggest creditors and will get a share of what is left in the pot.
Any potential bidders will need to acquire Whyte's 85% shareholding. This cannot be done without the help of Ticketus or the bidder faces a lengthy court battle.
Whyte's personal guarantees on the loan also mean Ticketus can pursue him for liabilities.
In its statement Ticketus added there have been numerous obstacles during the negotiations with Blue Knights: "There have been a number of challenging issues that have emerged over the course of the last month, including delays to the administration process, the SPL's ruling and the recent news from the SFA, all of which have affected the value of the Club and added complexity to the bidding process and our discussions with the Blue Knights."
Updating your subscription status