Hearts Administration: Funding crisis halting sale

BDO administrator Bryan Jackson.
BDO administrator Bryan Jackson.
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HEARTS administrator Bryan Jackson admits funding the club remains a huge problem for any prospective buyer despite more than 10,500 season tickets being sold.

Money from the first 7000 season ticket sales was used as funding by the previous board before Hearts entered administration on June 19. Jackson’s company, BDO, is still attempting to negotiate the sale of the club as a going concern.

Foundation of Hearts, the fans’ umbrella group, remain the only credible bidder for control so far, but its first offer has been rejected by Valnetas UAB – the administrators for Hearts’ biggest creditor, Ukio Bankas. Ukio is owed £15million of the club’s total £28.5m debt and have Tynecastle Stadium as security.

The Evening News can confirm that Angelo Massone has still to submit proof of funding for his £4m offer. The Italian has been given until Friday to complete due diligence but has done little investigating into the club’s finances. After Friday, BDO will demand he names the investors behind his bid or risk being discounted from the process. Bob Jamieson’s HMFC Limited has already been dismissed by Valnetas. Meetings are taking place between BDO and the Foundation as they prepare a second bid. Officials at Valnetas have stated privately that they would be willing to do a deal for around £5m but the Foundation’s cash offer was some way short of that figure. FoH have a separate £3.75m earmarked from fans’ pledges to fund Hearts over the next three years, which Jackson believes is crucial for any party gaining control. A total of £1.27m of income has been generated by Hearts since June, including more than £800,000 from 3500 season ticket sales during that period. Cash from the previous 7000 sales is already gone.

Jackson is eager that any takeover is done with a long-term plan in mind due to the significant shortfall in funding which still exists. “We have met with the Foundation of Hearts and they are still working on their bid. We are keeping an ongoing dialogue with them,” he said.

“The season ticket money has caused such a massive problem for all of us. If we had been appointed administrators and got the money from 7000 season tickets, then potentially that would take care of the funding gap.

“You might then have found that the Foundation could have got their bid up to the right purchase price because they wouldn’t have been worried about the huge hole in funding during the season. One of the biggest problems for them is not just buying the club but funding it. That’s due to this big hole.”

Supporters’ rallying has provided Hearts with huge amounts of funding in recent months but Jackson admits they will still have a massive part to play if the club is to stay alive.

“I can’t speak for the fans but it must be getting close to that well running dry,” he said. “Then again, this is an opportunity to save their club. It’s not just to save the club for the next five or ten years, you’re talking about saving it for the next 100 years. You just hope that there is still something in the bottle.”

Creditors have been called to a meeting with BDO on Monday and Jackson is still hopeful that a Creditors Voluntary Agreement can be reached in tandem with a new buyer to enable the club to exit administration