Hearts' £15m IOU to Romanov bank

By Darren Johnstone
Sunday 19 May 2013

Hearts may have to repay a £15 million debt to Vladimir Romanov's collapsed bank in full within two and a half years.

The figure, revealed to shareholders ahead of Thursday's club AGM, piles more pressure on the club ahead of tomorrow's crucial SPL board meeting which will determine if the Gorgie outfit are to be relegated for the first time since 1981 over a potential breach of insolvency rules.

Romanov has challenged the Lithuanian authorities' decision to begin bankruptcy proceedings against his business, which is said to owe creditors in the region of £300,000.

Should the bank's administrator call in that debt, Hearts would almost certainly face being placed in administration.

But as it stands, Hearts would only have until December 2015 to come up with that amount plus £150,000 every three months in interest service charges.

The fact that the bank, which also holds a £6.8 million floating charge over Tynecastle, is in the hands of the administrators further complicates the matter.

Hearts' parent company UBIG's decision to request that it be declared as insolvent has led to the SPL to investigate whether the club has suffered an 'Insolvency Event'. If they are found guilty of breaking financial regulations by the SPL board tomorrow, they would be relegated as a result of incurring a points penalty.

Hearts, who owe its parent company £10 million, have told the SPL they have not been reliant on UBIG since early 2012, something the financial results confirm. Part of the directors' report reads: "Due to the commitment of all those associated with the club we are cautiously optimistic about the future of the business. This resolve will be particularly essential as we move forward, given that the club can no longer depend on the support that it has received in previous years from UBIG."

Taken from the Herald