Crisis-hit Hearts set for urgent talks with the Central Bank of Lithuania in a bid to avoid relegation and being forced into administration
3 May 2013 07:26

Keith Jackson

THE Tynecastle club, which owes £15million to the bankrupt bank formerly run by owner Vladimir Romanov, is hopeful that the debt will not be called in immediately.
The Tynecastle club is hopeful of avoiding relegation and being forced into administration The Tynecastle club is hopeful of avoiding relegation and being forced into administration

CRISIS-RAVAGED Hearts are set for showdown talks with the Central Bank of Lithuania in a bid to avoid administration and automatic SPL relegation.

Record Sport understands hopes were high inside Tynecastle last night that a solution can be negotiated despite the collapse of Ukio Bankas, which was officially declared bankrupt yesterday in Kaunas. The financial institution – formerly run by Hearts owner Vladimir Romanov – has gone down with the Edinburgh club’s £15million debt to it still outstanding.

That debt will now be transferred to the country’s central bank – who could call it in immediately and put Hearts out of business or agree to allow the club to stagger on so long as they continue to honour the terms of an existing payment plan which runs until December 2015.

That was struck between Hearts and Ukio Bankas and covers only the interest costs of the £15m overdraft.

And Hearts, having been briefed by their own Lithuanian legal teams, remain hopeful the plug will not be pulled immediately.

They believe they can stave off administration at least until the end of the season on May 19 – thereby avoiding an 18-point deduction which would sentence Gary Locke’s team to the First Division.

New Hearts manager Gary Locke takes a training session with his players Hearts manager Gary Locke
SNS

In fact, chief executive David Southern is confident his cost-cutting plans – which will be implemented over the summer – will enable a streamlined Hearts to live within their means.

Now these proposals will be put in front of officials from Lithuania’s Central Bank who will determine if the club should be allowed to continue as a going concern.

A source close to the crisis told Record Sport: “There is a belief inside the boardroom that the picture is not quite as bleak as it has been painted. It would make very little sense to call in a £15million loan which they know the club cannot possibly repay.

“They stand to recoup more money by allowing the club to continue the interest repayment schedule.

“There is also a strong input at political level. Lithuania wants to show Europe it is in charge of its affairs and its international standing could be damaged if the collapse of a Lithuanian bank also put a Scottish institution out of business.”

Even if Hearts are granted a stay of execution there are still huge concerns over the club’s financial wellbeing and the threat of a full-blown crisis this summer.

Our source added: “All possible outcomes are being considered at this time.

“As long as the club gets until May 20 without being placed in administration then the club’s status as an SPL club would be secured.”

However, if administrators move in after May 19, Hearts would begin next season with a massive points deduction.

Taken from the Daily Record