Rangers crisis deepens as debt total hits £134m
Rangers' debt could rise to £134million, according to a report released by the club's administrators today.
Duff and Phelps revealed in a joint administrators' report and proposals statement to creditors that monies owed by the Scottish champions stands at £55.4million.
Rangers also owed £4million to Her Majesty's Revenue and Customs for the 'Small Tax Case' and could face a further bill of £75million, including interest and penalties, if they lose a dispute with the tax authorities, widely known as the 'Big Tax Case'.
The report showed Ticketus — who are also involved in the Blue Knights bid for Rangers — to be the club's biggest creditor.
Deals agreed between owner Craig Whyte and the London-based finance firm over the sale of future season tickets were worth £30.5million in total, with £26.7million still owed.
Monies owed to trade and expense creditors comes in at £5.5million, supporter debenture holders are owed £7.7million, football related creditors are owed just over £1million and cash to be paid to HMRC — excluding the Big and Small Tax Cases — stands at £14.3million.
The 'Small Tax Case' was bought against Rangers as the result of the use of a discounted options tax scheme for payments made to players Tore Andre Flo and Ronald De Boer between the tax years 2000/01 and 2002/03.
The bill was initially £2.8million but rose to £4million after interest and penalty charges.
The report stated: “The Big Tax Case was brought against the Company by HMRC in respect of outstanding amounts owed from the use of the EBT scheme to make payments to employees of the Company between the tax years 2000/01 and 2009/10.
“The total amount determined as due by HMRC in respect of this case is in the region of £75,000,000, including interest and penalties.
“The Big Tax Case is disputed by the Company and is subject to first tier tax Tribunal Proceedings instigated by HMRC. An outcome has yet to be determined by the Tribunal.”
Hearts are the biggest football creditor, owed £800,000 for an instalment of Lee Wallace's summer transfer. Celtic are owed £40,000 while Dundee United, Inverness and Dunfermline were also listed for various amounts of ticket money with the likes of Manchester City, Arsenal and Chelsea also owed cash.
Administrators revealed in today's report that Whyte had discussions with Duff and Phelps regarding the possibility of Rangers entering administration — and the implications — in November.
The report said: “Following ongoing dialogue with Liberty Capital and the company regarding fund raising and restructuring options, the company engaged Duff & Phelps in November 2011 solely to review the options available to the company should it become insolvent, together with an assessment of the consequences of any possible insolvency proceedings.
“This work involved regular dialogue with HMRC. Further discussions were had with HMRC, which involved the injection of third party funding but these further agreements were not honoured by the company.”
In February it emerged that Rangers, under Whyte, had sold shares gifted to them by Arsenal in the 1930s for around £220,000.
The report continued: “The company instructed Pritchard, a FSA regulated practice, to act as its broker for the sale of these shares during January 2012. It should be noted that Craig Whyte was the company secretary of Pritchard.
“The shares were sold for a consideration net of commission of £223,214 (believed to have been market value) however the funds relating to the sale of these shares were not transferred to the company.
“Pritchard was subsequently placed into the special administration regime on 9 March 2012. The joint administrators have contacted the joint special administrators to file a claim and to assist in the recovery of these monies, however it is not known at this stage whether these monies will be recovered in full.”
The administrators confirmed they had submitted a UEFA licence application to the Scottish Football Association but stated that European football still remains unlikely next season.