At the AGM of the Rangers Supporters Trust this morning the members gave the Board a mandate to continue negotiations with the directors of Rangers FC with the intent of organising the sale of 5.6 million shares in the club.
The shares in question comprise approximately 5% of the share capital of the club and approval for their issue and disposal was given at the RFC AGM in 2004. The manner and timing to be decided by the directors of the club.
LONG NEGOTIATIONS
Negotiations between the Trust and the Club have been ongoing for approximately four months and have reached such an advanced stage the trust required to gain approval from it’s members to take things further and appoint a broker who will ultimately handle the technical issues surrounding the scheme.
THE PROCEEDS OF THE SALE TO BE RING-FENCED
As the shares to be administered under the scheme are previously unissued all monies will got to the club and not existing shareholders and discussions have focussed on the issue of ring-fencing the income for youth development or other special projects.
MURRAY COULD GO UNDER 90%
One of the potential consequences of the issue of the new shares would be to take Mr Murray’s shareholding under 90% - he currently holds 91.8% - this would remove the possibility of him emulating Michael Glazer who, having 90%+, exercised his right under law to compulsorily purchase the shares of other shareholders at Manchester United.
FF is given to understand that Mr Murray is both aware of this and is comfortable with it.
Voluntarily going under the 90% barrier would be an unmistakable signal
to the support about his long-term intentions and commitment to the club as well as encouraging supporters to become shareholders and more closely interested in the financial affairs of the club.
LEGAL OBSTACLES BEING OVERCOME
The RST has used it special legal status as a trust to overcome complex regulatory issues with regard to the issue of the shares by instructing it’s legal advisors to seek exemptions under the law in negotiation with the Financial Services Agency.
The legal advice has been such that the Trust now feels confident to move the project forward to completion.
FINAL TOUCHES STILL TO BE DECIDED
Over the coming weeks the Trust and the Club will discuss issues such as setting in place a mechanism for setting the price of the shares.
It is expected that the final format of the scheme will be announced at
the RFC AGM in October.
MODEL FOR OTHER CLUBS
Supporters Direct has offered advice to the RST throughout this process and taken a keen interest in the form of the proposed Rangers sharesave scheme as it will be the first of it’s kind in the UK and will act as a model for other large clubs to follow.
The negotiations between the RFC and RST have highlighted the increasing credibility of supporters trusts throughout the UK.
The fact that a club the size of Rangers has invested so much time and effort to facilitate such a share issue which could see a trust administer a potential £5million plus venture speaks for itself.
WHAT HAPPENS NEXT?
Further details will appear on the RST website in coming weeks.
In the meantime have a look at the text of an advisory leaflet issued to RST members at the AGM today.