Hearts' future in Romanov's hands

MIKE AITKEN

HEARTS' owner Vladimir Romanov yesterday handed Tynecastle shareholders an opportunity to support his vision of transforming the club into Champions League contenders in the near future. Underlining the importance of Hearts becoming a private company again, Romanov said: "If we don't make the changes that we need to make today then it won't be possible to take Hearts to the next level tomorrow."

After disclosing an offer which has already secured 55.5 per cent of the shareholding in Hearts, Romanov tempted the holders of the remaining 44.5 per cent to sell him their shares for 35p each and turn his dream of European success into a reality.

"I want Hearts to be successful on the pitch and ultimately that means striving to become European champions," he said. "I believe that Hearts have the potential to develop into a major player within European football and that we can build the current business, both on and off the field, into a club in which the supporters and the city of Edinburgh can have pride. By means of the offer, we hope to consolidate control in order to continue our investment in the business and achieve our stated objectives."

Although Hearts' business plan for 2005-06 is based on finishing third in the SPL, the opportunity to split the Old Firm and finish in the top two is becoming an ever more credible possibility thanks to the unbeaten run put together by manager George Burley and the players.

Currently top of the league and selling out their home games - the 'house full' notice at Tynecastle will go up again for the visit of Dunfermline this afternoon - Hearts, paradoxically, remain unable to balance the books.

Only by increasing the capacity at Tynecastle to either 24,000 or 38,000, depending on planning approval for a re-development plan, can the club hope to generate the level of revenue which will change its status from hopefuls to contenders.

Qualifying for the Champions League next year, and earning the £10 million windfall enjoyed by all in the group stages, would also have a huge impact on Hearts' finances. Clearly, Romanov believes the best way to achieve these goals is to take the club, where he's already the majority shareholder, into private ownership by increasing his stake to more than 75 per cent.

Sporting his trademark maroon and white scarf, the 58-year-old chairman of Ukio Banko Investicine Grupe (UBIG) made it clear, though, that the money spent on acquiring shares will not deter him from helping Burley strengthen the squad when the transfer window opens in January. "From a player's perspective, what does he want when he moves to a new club?" pondered the Lithuanian banker. "I think he wants to go a club where he can become a star, realise his potential as a professional and receive the most attractive contract. And from a club's viewpoint, there will inevitably be rotation of players. Footballers come and go. If someone leaves, new blood comes in. So, yes, there will be new players [at Hearts] in January. And there will be new players in June of next year and the following January. If that process ever stops, then progress at the club will also stop."

Asked if he could ever imagine a day when Hearts could compete with Manchester United, Real Madrid, Barcelona, Chelsea, Milan and all the other European giants, Romanov replied: "Any side, irrespective of its financial power, has the potential to become a challenger. Who are the current champions of Europe? Greece. Today in football, you don't have the same secret mystique that existed 100 years ago in terms of achieving success.

"I believe success can be achieved through honesty and hard work. The principles I want to adhere to are that you have financial honesty and integrity on the pitch."

Asked why he thought the club's shareholders should trust him with the club's future, Romanov admitted he had "a huge desire to strengthen the old Tynecastle fortress".

He added the club's financial position had deteriorated over a number of years and plenty of other people had failed to show the necessary desire to take the business forward. "For the first time in a long time, the shareholders have a choice. They can come along for the ride or they can bail out and let me take the club to the next level. We're putting money in and restructuring the balance sheet rather than managing the downside. I'm asking everyone who has Hearts' best interests at heart to go along with me. Without their support, we can't achieve anything."

George Foulkes, the club chairman, believes shareholders have already been handed plenty of hard evidence to trust Romanov's stewardship of the club. "It's clear to me there is no one else who has shown the potential to come forward and make the kind of investment in Hearts which Mr Romanov has already done," said Foulkes.

"The other important point is that everything he has told the board he will do, he has done. He has been absolutely true to his word. It's his involvement which has enabled us to stay at Tynecastle.

"Mr Romanov has already done a huge amount for the club as the principal shareholder. How much more can he do as the owner? I would argue that anyone in his position, who is planning to invest huge amounts of money in further player acquisitions in January and the development of the ground, would want the comfort of being in control. I know I certainly would."

While there will be other days when the re-development of the stadium is higher up the agenda, Foulkes also made it clear the club was staying at Tynecastle and that two plans have been drawn up for the future. Plan A would see the development of a 24,000 seater stadium and Plan B for a capacity of 38,000.

Burley joy at Romanov announcement

HEARTS manager George Burley says Vladimir Romanov's announcement that he plans to gain outright control of the club can only benefit the team.

"It's great for the club to have the financial security and to push forward," he said. "It's been a great start for the team. If there is finance available to bring better quality in, that can only help, but I think the key is building things."

Extract from offer announcement made to Stock Exchange

"HEART of Midlothian (HoM) 2005 is a private company recently incorporated in Scotland, and was formed at the direction of Ukio Banko Investicine Grupe (UBIG) for the purpose of making the Offer. HoM 2005 has not traded since the date of its incorporation nor has it entered into any obligations other than in connection with the Offer. The directors of HoM 2005 are Roman Romanov, the son of Mr Vladimir Romanov and Sergejus Fedotovas, a director of UBIG.

"HoM 2005 is 100 per cent owned by UBIG. The funds required for the making of the Offer have been provided by UBIG from existing cash resources.

"UBIG is a private investment company registered in Lithuania. The main activities of UBIG are investment and trade project finance, asset management, investment operations and financial consulting services. UBIG is also involved in managing medium and large-scale commercial and investment projects in aluminium, textiles and other industrial sectors, with a primary focus on Lithuania, Russia, the Ukraine, and former CIS countries, Eastern Europe and the Balkan region. Assets under the management of UBIG amount to more than 400,000,000 Euro.

"Vladimir Romanov, aged 58, is a Lithuanian businessman based in Kaunas, Lithuania. His business involvements include finance, property and other interests in Lithuania and other Eastern European countries.

"Mr Romanov is Chairman of UBIG and currently owns, directly and indirectly, 65.5 per cent of UBIG. He has a direct interest in UBIG of 30.6 per cent. Mr Romanov controls Inergo, which in turn owns 25.0 per cent of UBIG. Through his family's holdings in UKIO Bankas Mr Romanov controls a further 3.9 per cent of UBIG. Mr Romanov indirectly controls 49.9 per cent of Balkan Investment Bank, equating to an indirect holding of 6 per cent of UBIG. This series of direct and indirect interests accounts for 65.5 per cent of UBIG's shares. The remainder of the shares in UBIG are held by independent third parties, none of whom ultimately own more than 10 per cent of UBIG. Details of other persons who have an interest of 5 per cent or more in the share capital of UBIG for the purposes of Rule 24.2(c)(iii) of the City Code will be set out in the Offer Document.

"Mr Romanov and his immediate family own a total of 29.0 per cent of UKIO Bankas, a Lithuanian-listed bank.

"As at the date of this announcement, UBIG owns 3,778,033 Hearts Shares, representing approximately 29.9 per cent of the issued share capital of Hearts."

Taken from the Scotsman