Sevco on borrowed time

Sevco need money.

The only question this week on Planet Fitba is this: who will lend money to the Ibrox outfit?

Recently, the Rangers International Football Club CEO and his colleagues were in City of London asking some serious guys for serious cash to keep their loss making subsidiary HMS Sevco afloat.

I have in my possession the names of the five companies that they approached last month in the City of London.

However, Graham Wallace and Philip Nash left the Square Mile empty handed.

One ‘boutique firm’ connected to the prestigious Munich Reinsurance Company agreed to the meeting only out of courtesy to Wallace because of his time at Manchester City.

These chaps asked Graham Wallace a straight question about the ownership of the assets and he couldn’t give them a straight answer to their satisfaction.

Although finance is global most of the companies they visited in the Square Mile are conduits for cash from the Eurozone.

This added the problem of the exchange rate to deal which, I am reliably informed, puts the final price of any deal up by about five per cent.

In all of the meetings they found that RIFC was off the ATR scale.

That is ‘Attitude To Risk’, which means the higher the risk the higher the points above base rate.

Sometimes for a bad risk these boys will go up to 25 points above Euribor.

It is essentially corporate Wonga.

However, RIFC couldn’t even get that!

When you go to these guys your business is already in trouble.

Moreover they need to know the bottom of your barrel, how big the hole is to the last penny.

You also have to show them that you have a clear plan of action to get yourself out of the financial mess you’re clearly in.

This is high risk borrowing for people in a real fix.

The people who are lending are pricing it at that level of risk.

Quite simply it is last port of call stuff.

Yet even these guys won’t touch them.

It would appear that Ibrox is now a toxic brand in the wider business world.

We know that no one will lend to them.

They can’t open a current account and get standard banking facilities.

This is a company with no credit line from a bank.

The more I learn about his guy Wallace, the more I feel for him.

The job was sold to him as a stepping stone to bigger and better things in England.

I understand that he took the gig on the understanding that a sale and leaseback deal on the fixed assets of Sevco was a given.

Sadly, the stadium and the training ground needed a clean bill of health.

Thankfully Albion Car Park is in tip top shape.

However, the stadium that John Brown played for has seen better days and I understand that the repair list is a nightmare.

Murray Park also has a few issues, but Ibrox is a no-go area.

When Donald Muir took over at Rangers in 2009 the maintenance regime was cut to the marrow.

So far the only battle that Graham Wallace has won inside Stalag Sevco has been to get Brian Stockbridge out of the door.

The clever folk at Laxleys believed that voting the hapless Financial Director off the board at the AGM would create more problems.

So they thought it better to vote him back on and then show him the door afterwards.

When he was on gardening leave his desk yielded up an entire treasure trove of bad news and they found bills that had been unopened, bills that had not been logged.

Overnight the bad news got worse and the debt hole got bigger.

Stockbridge was then asked to accompany Graham Wallace and Philip Nash to London on the pretext of meeting with potential lenders.

This, I was told, allowed the CEO and his highly paid associates, along with people from the Laxleys

“To sweat Stockbridge for what he knew”.

Philip Nash is now effectively acting as chief financial officer (CFO) and doing the job that Stockbridge was meant to do.

With each passing day, Nash is turning more and more stuff up.

Graham Wallace does have a plan to turn this omnishambles around, but that requires cash in the short term.

Only last week the planned redundancies of staff at Ibrox and Murray Park were called off because the new entity didn’t have the cash to pay them statutory redundancy pay.

The workers were asked to sign a confidentiality agreement before the meeting started.

Then they were told that they could go now and they would get paid what was due them in terms of severance pay when the company had it.

It is unclear if there is enough money in the clumpany’s bank account to pay ALL of the wages this month.

One well-placed  insider told me that even if the first team squad are paid what they are due in February, it is not certain that there will there be enough money to pay all of the other staff.

Let’s be clear on this, dear reader: Stalag Sevco can only escape an insolvency event if someone, anyone, will lend them money.

Their monthly cash burn is not £1m per month; that is rather wide of the mark.

It is only £714,000 per month,

Then there are those pesky bills.

There is more, much more to come on that one dear reader.

Developing story…

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