Hearts hit by doubts over cash for players

RICHARD BATH

HEARTS' ability to strengthen their squad in the January transfer window was brought into question this week with the publication of the share offer documentation by Vladmir Romanov's financial advisers, British Linen Advisers Ltd.

Acting managing director Roman Romanov assured fans last week that the Gorgie club had the financial resources to acquire players during the break. That, however, was cast into doubt by a key passage in the 73-page offer document.

It relates to two loans of £2.3m from Romanov's personal investment vehicle, UBIG, to Hearts. The first, for £800,000, was made to Hearts on September 26. The second, for £1.5m, was on November 4.

Both loans are due to be repaid on January 31, yet if that £2.3m is not forthcoming - and it's difficult to see how that could happen given that the club debt stands at around £20m - the sum is then either subject to a 10% annual rate of interest, which is significantly above the usual rate levied on commercial loans, or a second loan condition kicks in.

"If the loan is not repaid by this date (January 31) ... UBIG will claim as repayment the proceeds of any player sales that the Company may decide to pursue."

Given the unlikely nature of Hearts being able to pay off such a significant loan through working capital, the club will either see the already substantial debt balloon or need to sell players to pay back the loan.

With all of the acquisitions under the Romanov regime made via loan deals (several with Romanov's Lithuanian club, Kaunas) the most saleable assets at the club are Scottish internationals, captain Steven Pressley, goalkeeper Craig Gordon, defender Andy Webster and midfielder Paul Hartley.

Three of them have been the subject of firm interest from clubs in the past year, and fans will be particularly concerned that Hearts may try to cash in on the interest in Gordon, who was reported to be the subject of a substantial bid from Palermo earlier this season.

In the circumstances, Roman Romanov's assertion that Hearts would be willing to enter the transfer market in the new year as buyers rather than sellers will be closely scrutinised by supporters. However, one of Romanov's financial advisers claimed the clauses were not a mechanism for taking cash out of Hearts.

"I don't think it is intended to work like that," he said. "The way it is expressed is just a form of security. The idea is to get up to 75% of Hearts shares and then restructure the finances. These loans are just a stopgap mechanism, like an overdraft."

But he admitted the clauses would allow Romanov to take money directly from player sales: "In the worst case scenario it could happen, if you wanted to put the blackest possible interpretation on it."

Taken from the Scotsman