UBIG creditors to take key vote on Hearts shares next week

Gary Locke is praying for a posivitve outcome on the vote
Gary Locke is praying for a posivitve outcome on the vote
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Hearts hope to take a major step towards exiting administration next week when creditors of Ukio Bankas Investment Group meet to vote on transferring the club’s shares to owner-in-waiting Ann Budge.

A creditors’ meeting has been scheduled for next Friday, March 28, with a vote due to take place on releasing UBIG’s 50 per cent shareholding in the Edinburgh club. Should creditors agree to the share transfer and have it legally ratified in Lithuania, Hearts will be able to complete a £2.5million Creditors’ Voluntary Arrangement (CVA) and exit administration within a matter of weeks. The club’s administrators, BDO, plan to add UBIG’s 50 per cent stake to the 29.9 per cent held by Ukio Bankas and transfer all shares to Budge’s BIDCO holding company in one transaction. The shares are worthless at the moment as Hearts, UBIG and Ukio are all in administration after the empire of Russian businessman Vladimir Romanov collapsed last year.

However, a token payment of more than £50,000 has been agreed with UBIG administrators, Bankroto Administrativo Paslaugos, for the release of Hearts’ shares. The deal will be concluded provided UBIG’s creditors vote it through next Friday.

Budge is personally funding the £2.5m CVA and intends to become chairwoman at Tynecastle, but the CVA is conditional upon the share transfer.

Budge hopes to be in charge before the end of April but that will depend on how much time it takes to legally transfer shares from Lithuania. She is expected to run the club for anything up to five years before handing control to the united fans group, Foundation of Hearts.

For now, Hearts’ immediate fate appears to rest with the Lithuanian creditors of UBIG, who are owed around £9m by Hearts but will not see any money from the CVA as they are an unsecured creditor. The only secured creditor is Ukio Bankas, who are owed £15m by the club.

Manager Gary Locke today remained cautious on the prospect of his club finally exiting administration after nine months. He is wary about the outcome of events in Lithuania and is concerned about the possible collapse of the shares deal.

“It could collapse – but I pray that does not happen,” he said. “I’m trying to look at the positive side of things.

“We’re hoping Ann will come in and take the club forward, which would be fantastic. But at the back of my mind there is still a lingering doubt about events in Lithuania, so the next month is crucial for Heart of Midlothian Football Club.

“Hopefully it will have the positive ending that we all want. Until it is signed off, we won’t know. The best word to sum up this situation is ‘frustrating’.

“Everyone here would love to get an answer and then move on.”