Hearts parent company UBIG set for insolvency

By GARETH ROSE
Published on 16/05/2013 23:55

THE Vladimir Romanov era at Hearts appeared to have ended on Thursday night, with the request of Ukio Banko Investicine Grupe (Ubig) to enter insolvency.

It means both Ubig and its sister company Ukio Bankas, both of which were controlled by Mr Romanov, could now be in the hands of administrators, who will decide the future of the Tynecastle club.

Hearts supporter groups were due to meet last night to further their plans for a takeover, and urged more fans to back their bid.

Neil Patey, a football finance expert, said the future of the club would probably be decided in the summer, possibly within weeks.

Ubig is the majority shareholder in Hearts, owning about 79 per cent, but pledged some of those interests to Ukio Bankas to try and shore up the company before Christmas. However, Ukio Bankas collapsed with debts of more than £300 million.

The future of both companies may need to be resolved before the uncertainty surrounding Hearts can be cleared.

Mr Patey said: “In the UK, [Ubig] would be getting close to appointing a voluntary administrator. I would expect that’s the next step.”

He said Mr Romanov had launched an appeal against the appointment of an administrator at Ukio, which will be heard in a Lithuanian court at a date yet to be decided.

If he is unsuccessful, the administrators of Ubig and Ukio Bankas will decide what to do with their assets – including Hearts’ £15m debt to Ukio 
Bankas.

“If he [an administrator] can get his hands on the shares, he can try to sell them, or otherwise force the administration of Hearts Football Club and we will have the same situation as we had at Rangers, trying to get a Company Voluntary Arrangement.”

However, Mr Patey also warned that the close season, when the clubs loses its income from match day receipts, could pose a bigger danger.

“In the summer season, if they can’t get any income and can’t pay the bills, that could force 
administration,” he said.

“People should not forget the threat of not being able to pay the bills.”

Ian Murray, Labour MP for Edinburgh South and the figurehead of the fans’ takeover bid, hopes yesterday’s development will bring clarity to which company owns what at Hearts.

“I would expect that Ubig would have kept at least 50 per cent of shares,” he said.

“We have known for a long time that Ubig was a busted flush. So it was pretty inevitable that at some point Ubig was going to be placed in 
liquidation.

“It brings some clarity to who owns what. That has to be part of the reporting mechanism.”

He also hopes the development will galvanise fans.

Mr Murray is spearheading discussions between the Federation of Hearts Supporters’ Clubs, the Foundation of Hearts, Heart of Midlothian Shareholders’ Association, Heart of Midlothian Supporters’ Trust, Hearts Youth Development Committee and Save our Hearts.

“It takes, once and for all, the current ownership of Mr Romanov out of the picture,” Mr Murray said.

“People have to realise it’s a difficult situation, but also a real opportunity.”

If Hearts entered administration before 20 May, then an automatic 17-point penalty – a third of the total the club accrued last season – would be imposed, leaving them adrift of relegated Dundee.

However, the complicated state of the club’s ownership makes it unlikely to progress that quickly.

Taken from the Scotsman