Hearts in administration: club warned they face liquidation unless offers are improved

Lithuanian bank Ukio Bankas is owed £15million by Hearts but its administrator, Gintaras Adomonis, has issued the grave threat to BDO, the trouble-shooters now running the Edinburgh club, after they were also placed into administration.

Adomonis has told BDO to continue negotiation with fans' group the Foundation of Hearts and Five Stars Football Ltd, which lists controversial former Livingston owner Angelo Massone among its directors. A third offer placed by HMFC Ltd has been rejected outright.

If the negotiations fail, Ukio Bankas will initiate the process of liquidating Hearts.

In a statement on Monday, Adomonis said: "I can repeat that we are doing everything we can to save the club functioning. However, I am obliged to protect solely the interests of Ukio Bankas and its creditors.

"If no feasible offer with terms and conditions acceptable to Ukio Bankas creditors is achieved, Ukio Bankas will remain with the only solution - liquidation of Hearts of Midlothian Plc and enforcement of the standard security over Tynecastle stadium.

"I sincerely hope this is the way of things we still can avoid."

BDO’s Bryan Jackson, joint administrator of Hearts, said: “We are continuing to work with the administrator of Ukio Bankas and the bidders to enable the club to exit administration as a going concern.

“However, it should not be forgotten that it is the duty of the administrator of Ukio Bankas to achieve the best financial result for the bank’s creditors, and he will act to ensure that this happens.

“Liquidation is always a possibility when a business is in administration, but we are confident that we can work with the bidders to produce an outcome that saves the club and provides an acceptable return to the creditors of Ukio Bankas.

“I believe that we are making progress towards a constructive solution and hopefully all parties will recognise that the best value will be realised by selling the club as a going concern.”

Ian Murray MP, independent chair of the Foundation of Hearts, said: “Our bid team, working on behalf of the Foundation of Hearts continues to negotiate on the points of the bid submitted on our behalf to BDO.

"Meetings are scheduled for this week, and have been since our revised bid and proof of funding was submitted last Wednesday, as requested. It’s very much business as usual.

“We remain hopeful that we can demonstrate to the club’s creditors that our proposal provides the strongest return and carries the lowest risk, in short by far the best solution.

“This announcement from Lithuania does again, however, demonstrate the need for supporters to set up direct debits via foundationofhearts.org, if they can do so.”

Ukio Bankas holds a 29.9 per cent shareholding in Hearts and has a floating charge on Tynecastle as security against the money it is owed.

Meanwhile, Kaunas-based investment firm UBIG, who own 50 percent of the club, is owed a further £10 million by Hearts.

Both companies were once controlled by former Hearts owner Vladimir Romanov but are now insolvent.

Ukio Bankas is in the hands of administrators while the process of appointing trouble-shooters to oversee the liquidation of UBIG was launched last week.

Hearts are due to play St Johnstone in the first match of the season on Sunday, starting on minus 15 points under league rules for clubs in administration.

Taken from telegraph.co.uk