Then she spat out her coffee

I am sure that regular readers here will not have gasped in surprise when they read this amazing exclusive from the BBC.

The background to this has been extensively reported on this site.

Mr Graham Wallace has been in the City for several weeks now  and perhaps the following vignette will be of interest:

Two weeks ago Graham Wallace was in a meeting with a senior hedge fund manager at a prestigious Square Mile outfit.

Accompanying this master of the universe where two junior staff.

The reason that the RIFC CEO was there was because Laxey Partners and the institutional investors had opened some doors for attempt to raise finance.

It also helped that Graham Wallace himself has an excellent reputation in the City.

He was told:

“Graham we gave you this appointment because of who YOU are.”

However, when Mr Wallace started his pitch about the plan to get RIFC/TRFC on a self-sustaining basis the female member of staff accompanying the senior hedge fund fellow laughed as she swallowed her coffee leading to some nasal issues.

It was an awkward moment and one that became an item of Square Mile gossip.

The senior chap then got serious:

“You’re asking us to buy into something that the AIM could shut down in the morning!”

For the avoidance of doubt this hedge fund had not invested in RIFC previously and I would assume by what transpired in the meeting that they aren’t going to do so now.

Last week I too was in the Square Mile and I was speaking to well-placed sources that were aware about what Mr Wallace was about.

The problem for RIFC is that the IPO was a one off opportunity.

The clue is in what the “I” stands for.

Quite simply the Initial Public Offering can’t happen again.

For investors an IPO is a gamble as they don’t have any performance to go on.

After that the market gives information on how the company is doing and since RIFC was set up it has, quite frankly, been a money pit.

In January /February there was a chance to turn this ship around.

The plan was to be in and out of Administration in ten days-two working weeks.

However major shareholders like Blue Pitch Holdings and Margarita Holdings didn’t fancy an administrator looking under the hood.

So it didn’t happen.

Then Plan ‘B’ was the Shareholder Share Option.

That would have funded an austerity programme that would then have made the Share Issue in the City a reasonable prospect.

A Square Mile source has told me that a trimmed down Ibrox operation could have raised as much as £15 million.

However all of that has been subverted by the Brian Stockbridge share option.

The RIFC board cannot now be entirely certain that Charlie and the boys have more Stockbridge type options in their back pocket.

The folks in the City have told Graham Wallace that RIFC, as a business proposition, is a non-runner.

The 120 Day Review was that length to allow Blue Pitch and Margarita to leave in good order.

However they decided to eschew that offer and they’re still in the tent.

It was also 120 days long so that the ‘onerous contracts’ could be chased down and the entire state of the company’s problems could be properly assessed.

It is beyond dispute that RIFC/TRFC now requires external finance to fund austerity and to continue operating.

Their cost base is too high for the revenues they can currently generate.

Anything else is spin.

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