King says Rangers facing costly battle with Ashley
Rangers made a loss of £3.3m for the year up to June 30 and chairman Dave King confirmed soft loans from investor groups such as the so-called Three Bears "remain necessary" to keep the club afloat.
Despite this King promised manager Mark Warburton would be backed in the transfer window. But King, speaking at the Ibrox AGM yesterday, also confessed the club faces having to shell out significant sums on legal fees to defend itself against Ashley's courtroom challenges for a "period of time".
Earlier this year, a senior judge at the High Court in London branded Sports Direct's attempt to have King jailed for contempt of court as "designed to intimidate" following a hearing over an alleged breach of confidentiality. The sportswear firm later dropped the case.
"The situation with Sports Direct is pretty much out of our control as to what Mike Ashley might or might not do," explained King. "What we can say is he will do what he will do and we will resist it and defend it as strongly as we have done."
King is now hoping shareholders will arm him with the power to water down Ashley's 8.9% stake in the club. The board proposed a special resolution to offer shares to investors without needing to involve all existing shareholders.
King's board will find out early next week whether it has gained the 75% backing needed to overcome the opposition of Ashley and former directors Sandy and James Easdale. And the chairman said: "Over the last year we have made attempts to convince dissenting shareholders of the merit and business sense of our funding strategy.
"I'm hoping that we may receive greater support at this AGM and finally be able to put our funding plan into action.
"I've been advised that Ashley and the so-called Easdale Bloc have again opposed the resolutions tabled at this AGM but I hope our achievements over the last year may result in some of the others being won over."
King confirmed he and his fellow investors had spent almost £20m since snatching control from the old regime last March, having bought up £6m in shares and handed out more than £13m in interest-free loans. Those loans will be converted into shares should the special resolution pass.
King stated there was a plan B to get further investment from other avenues if the special resolution was not passed, adding: "The business plan that we have in place is completely independent of the funding plan.
"The only difference will be is whether we continue to rely on soft loans. But the comfort level I have is that the soft loans are being provided by individuals who are looking for no returns on these loans or immediate repayments."