The guts of a million

Due to my rather dramatic incarceration down the word mines, I have had little time for the Sevco saga recently.

Therefore, I am late to all of this dear reader.

I emerged this morning into the light under a foreign sky to the ongoing transfer window omnishambles.

Once more it would appear that the stenographers have acted in good (blind) faith.

At the start of this week, the award-winning chaps were confidently stating that Mr. Warburton would get the players he had identified.

These were Brentford midfielder Toumani Diagouraga and St Johnstone forward Michael O’Halloran.

Now the former has signed for Leeds and the latter played for the Perth men yesterday at Celtic Park.

In fairness there has been some action on the acquisition front by Sevco.

They have signed a backup goalie from Poland, who had been working as a fisherman, and a winger who bought out his contract at Doncaster.

Next season the squad will be further strengthened by two players from Accrington Stanley already signed on pre-contract deals.

That type of business certainly sends out a warning signal!

Although dear reader I am fashionably late to this story, one thing appears to have gone unreported.

If Mr. Warburton is to be finally provided with a …ahem… war chest then it will have to be borrowed.

That is because the funds cannot come from within the business which itself only survives due to external finance.

While I was in the dark trying to excavate a serviceable metaphor, Mr. David Weir stated that Sevco would continue to flex their financial muscles to bolster the squad.

According to Mr. Warburton’s loyal lieutenant, it would appear that they are still in the market for free players.

Of course, bringing in a loan player can cost the receiving club a portion of the player’s salary and living expenses.

I am told that there is a story to be unearthed apropos the return to White Hart Lane by Nathan Oduwa.

As regular readers here will know the Sevco script writing team are consistently at the top of their game.

Indeed,the story line for this transfer window could not get any more engaging for the audience if they had Mr. Warburton quietly sounding out Newcastle United for some loan players.

Of course, that would be preposterous…

Like all good scripts the Sevco screenplay has to remain faithful to the central premise of the drama.

This four-year-old spin-off series is about a loss making business without a credit line from bank.

The original drama about Rangers was killed off in 2012.

Sevco borrows a lot from the original Ibrox drama.

In fact, Sevco borrows a lot, and that can be costly.

Indeed, one of my number crunching buddies pointed out the following to me:

“Looking at the recent announcement that RIFC has raised £6.5 m in loan facilities, it is worthwhile considering what the financial cost could be. Ordinarily loans that are secured against assets like a house, for example, would attract an interest rate of 3% to 5% p.a. I would expect that there is some security in place over most of the assets of RIFC, where Edmiston House and the car park are unencumbered. However, with the criminal court cases pending, and prospect that some of the other assets may not be saleable, a more commercial charge is more appropriate. An interest charge for a loss-making company without any bank credit facilities is likely to be in the region of 15%-20% per annum.

“Assuming the directors have provided £1.5m, and the £5m is raised on a commercial basis from the Hong Kong financiers, this would cost between £750k to £1million per annum.”

Hmmm, at least £750k?

Well, I would call that the guts of a million!

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