Valnetas can seal Foundation of Hearts bid status

Foundation of Hearts will be awarded preferred bidder status is Valnetas UAB, the administrators of Hearts' main creditor Ukio Bankas, give their approval. Picture: SNS
Foundation of Hearts will be awarded preferred bidder status is Valnetas UAB, the administrators of Hearts' main creditor Ukio Bankas, give their approval. Picture: SNS
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FOUNDATION OF HEARTS will be named preferred bidder for the Edinburgh club by the end of this week, provided Hearts’ biggest creditor gives their approval. Rival bidder Angelo Massone has yet to provide proof of funding for his offer and administrators BDO see the Foundation as the only credible group seeking control at Tynecastle.

Lithuanian bank Ukio Bankas, owed £15million by Hearts, are in the hands of administrators Valnetas UAB and are the club’s biggest creditor. Valnetas must agree to the Foundation being awarded preferred bidder status and are expected to deliver their verdict before Friday. Thereafter, both parties must negotiate a fee for a Company Voluntary Arrangement (CVA) before Hearts can exit 
administration.

Valnetas dismissed an offer from Bob Jamieson’s HMFC Limited last month, but have so far been reluctant to cast Massone’s company, Five Stars Football Limited, aside. Their £4m cash proposal for a CVA is greater than the Foundation’s, but proof of funding has not been submitted. Massone has also not detailed any working capital in the offer, whilst the Foundation have £3.75m set aside from fans’ pledges to fund Hearts over three years.

The next stage now depends on Valnetas’ decision and if they are willing to work with the supporters’ umbrella group as the preferred bidder. That should become clear over the next 48 hours.

Creditors voted on Monday to allow BDO to continue in their attempts to secure a CVA and sell Hearts as a going concern. Ukio Bankas hold a 29.9 per cent shareholding in Hearts and own Tynecastle Stadium as security over the debt. Ukio Bankas Investment Group (UBIG) hold a 50 per cent shareholding, and it is understood any buyer would have to agree another smaller fee with UBIG in order to release those shares.

The situation is complicated by the fact UBIG have declared themselves insolvent, but have not yet had administrators appointed. That process may not be completed for several weeks and could therefore delay any sale of Hearts.