Hearts administration: ‘Newco’ a possibility

HEARTS could be forced to adopt a “newco” route admitted Trevor Birch yesterday, as the joint administrator cautioned against expecting a swift resolution to the club’s financial struggles.

The supporters are doing their bit, with BDO, the firm of administrators now running the club, confirming that the target for 3,000 extra season-ticket sales has “almost” been met, a fortnight to the day since Hearts entered administration. As of last night, only another 200 sales are needed to reach this target.

With the closing date for bids for the club set for July 12, Birch is now hoping to separate the serious offers from the unrealistic ones. However, he concedes that the main obstacle to reaching a Creditors Voluntary Arrangement [CVA] could yet lie in Lithuania, where parent company UBIG have still not been placed in formal administration.

The delay prevents BDO from acquiring UBIG’s 50 per cent shareholding in the club. “If we cannot get the shares then we have to start thinking: ‘is there another way of doing it?’ ” said Birch. “That might mean, of course, the Rangers way. They set up a newco because they could not do a CVA because of HMRC.

“But that took them out of the league, so there is a precedent there,” he added. “You try and avoid that at all costs. Whether the SPFL and the SFA would treat us the same way, I don’t know.”

Whatever happens, Birch is prepared for the long haul. “I am anticipating that it might be a prolonged process and we have to be ready for that,” he said. “The best guess for the earliest time to come out of administration would be three to four months.”

Until administrators are appointed at UBIG, BDO are restricted in what they can do. “That is the wrinkle,” said Birch. “I am not saying you can start a second season in administration. It starts to get a bit tricky. I would like to think we’re out by the window in January, but you can’t call it.”

Taken from the Scotsman