UBIG collapse could be gamechanger for Hearts bidders

Hearts administrators BDO spent yesterday sifting through the details of the bids submitted by the three groups hoping to take ownership of the Tynecastle club, as reports emerged of a major step forward in efforts to put a company voluntary arrangement (CVA) in place.

It has been reported in Lithuania that Ukio Bankio Investicine Group [UBIG], the club’s former parent company and a secured creditor, has been officially declared bankrupt and had liquidators appointed by the courts, although BDO were still seeking confirmation that this was the case last night.

UBIG has a ten-day period in which to appeal any decision. Should the liquidation be formalised, it means the Hearts administrators can ask to gain access to the 50 per cent shareholding held by UBIG in the Tynecastle club.

UBIG has been technically insolvent since announcing they could not meet their financial commitments in May.

Joint administrator Bryan Jackson has confirmed that both HMFC Ltd and Five Stars Football Ltd had tabled bids on Wednesday evening, after the Foundation of Hearts submitted an improved offer by the 5pm deadline.

Although the bids by HMFC Ltd, fronted by former club sponsor Bob Jamieson, and former Livingston owner Angelo Massone’s Five Stars Football Ltd were received after the deadline, they have been forwarded to Lithuania, and Jackson confirmed that he had held discussions with administrators for Ukio Bankas, the club’s other major creditor, in Lithuania on the subject of the bids.

“I have discussed the three improved offers with our Lithuanian administrators today via a conference call and they are going to consider them further and will give me instruction in how to proceed with them in the next few days,” said Jackson.

Hearts’ administrators BDO were restricted in what they could achieve before UBIG’s insolvency was confirmed by the courts in Lithuania and
liquidators appointed.

This has been described as “the last piece in the puzzle” towards securing a CVA, which is necessary for Hearts to exit administration. However, the process of naming a preferred bidder could take some time.

The administrators are legally bound to consider all the offers received even if there are doubts about the method of funding, with the secured creditors in Lithuania determined to secure the maximum price. The offer made by the Foundation of Hearts is understood to still be slightly shy of the asking price and negotiations are expected to continue in the coming days.

Jackson is set to hold further discussions with the main individuals behind each bid as the administrators seek to gain clear evidence of funding and establish whether they are realistic offers or not. It us understood that this process could take up to a fortnight.

Taken from the Scotsman