Hearts administration: Ukio Bankas snubs all bids

All three bids for Hearts have been turned down. Picture: SNS
All three bids for Hearts have been turned down. Picture: SNS
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ALL three offers for control of Hearts have been rejected by Ukio Bankas administrators in Lithuania.

Valnetas UAB are seeking greater financial bids for Ukio’s creditors and have today threatened to liquidate the Edinburgh club if they do not achieve a greater sum for the £15 million they are owed.

Hearts’ administrators BDO, working on Ukio’s behalf, will now return to the Foundation of Hearts and Angelo Massone’s Five Stars Football Limited to see if they are willing to increase their bids. HMFC Limited, the third party which submitted an offer for Hearts, is understood to no longer be in the running.

Control

Ukio are in control of Tynecastle Stadium as security for the £15m they are due, with Hearts also due insolvent Ukio Bankas Investment Group £10m. The parties bidding for control want a Creditors’ Voluntary Arrangement in place to help the club exit administration, but Ukio’s creditors want more money than that offered to date by Foundation of Hearts and Massone.

A statement from Valnetas UAB said: “Ukio Bankas – the main creditor of Scotland’s football club Hearts - obligated the club’s administrator BDO to continue negotiations with two potential investors with the aim to improve financial offers. If the negotiations fail, Ukio Bankas will initiate the process of liquidation of the football club.”

Gintaras Adomonis, general director of Valnetas, added: “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.”

Solution

Bryan Jackson, joint administrator of Heart of Midlothian FC plc and a partner in the Business Restructuring team at BDO LLP, 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.”