Rangers bidder Charles Green has offered a £8.5m loan to buy the crisis-hit club dependent on them staying in the Scottish Premier League (SPL).
The administrators Duff and Phelps said that the proposed company voluntary arrangement (CVA) could result in £4.9m being made available to pay unsecured creditors.
According to the report released on Tuesday, administrators claim the alternative newco route for Rangers would result in creditors receiving around £950,000.
Mr Green’s Sevco consortium has agreed to buy Craig Whyte’s 85% stake in the club for £1, the only part of the proposed deal that does not involve the group getting repaid. The £8.5m loan to cover administration costs of around £3m, as well as all creditors, and will be repaid by the club with interest by 2020.
The deal is secured against all of the club’s assets, including Ibrox stadium and Murray Park, and is dependent on Rangers staying in the SPL and continuing their membership of the Scottish FA. If the club did not have to cover any further HMRC liabilities by winning the first tier tribunal appeal, this offer by Sevco represents around 9p in the £1 for unsecured creditors.
Administrators also state that should the CVA fail, on July 23, Mr Green is "contractually obliged" to purchase the club’s assets for a newco for £5.5m. Whether this cash is also in the form of a loan is unclear and details of this proposal are "confidential".
According to the report, the CVA offer would be supplemented by outstanding transfer fees owed to the club, as well as any money raised from the £25m court action Duff and Phelps have raised against Collyer Bristow and owner Mr Whyte’s Rangers FC Group.
The administrators state that creditors will not be paid under the CVA until both this action and the "big" tax case are known.
Paul Clark, joint administrator, said: "This proposal offers the best return for all stakeholders given the position the club is in. If approved by the creditors, the CVA proposal will rescue the club and finally enable the company to exit administration."
What cash Mr Whyte could claim as a result of his floating charge over the club is still unclear as administrators have reported the amount he could claim for as a secured creditor is "to be confirmed".
However, a footnote in the report adds: "The joint administrators understand that, in respect of this security: group has confirmed that no debt is secured and group has agreed to release the security concurrently with the approval of this (CVA) proposal."
HM Revenue and Customs are owed more than £18m in unpaid VAT and PAYE dating from Mr Whyte’s takeover of the club last May. It is owed a further £3m at least in respect of the 'wee' tax case, for the use of the discounted options scheme to pay players Tore Andre Flo and Ronald De Boer from 2000 to 2003.
The club is also facing a tax bill of up to £75m from a first tier tribunal case over the tax avoidance employee benefit trust (EBT) scheme Sir David Murray used to pay players and staff from 2001 to 2010. Duff and Phelps noted in the report that no payment towards the CVA would be made until the big tax case result was known, and the legal battle with Mr Whyte and Collyer Bristow - due to recall at the High Court in London in Ocotber - are concluded.
Administrators list their fees as £3m for a CVA, but including legal fees and other costs would total £5.5m, compared to the estimated £3.6m trading shortfall of the club by June 6. If the newco route is taken, the overall costs for the insolvency move would rise to an estimated £6.2m.
Former directors Alastair Johnston, Ali Russell and Gordon Smith have all submitted claims as creditors, with the amounts owed still to be confirmed by administrators, according to the report. Former player Nikica Jelavic and current director Dave King are also listed as creditors owed an unconfirmed amount by the 140-year-old club.
Ex-director Phil Betts, who was part of Mr Whyte’s takeover group last May, received a £234,000 payment from money held by Collyer Bristow in relation to Rangers, according to the report by Duff and Phelps. This is being pursued by the administrators now.
Last August Regenesis Holdings Limited "appears to have received a payment of £250,000" from the funds. This company is linked to Mr Whyte’s business associated the Earley brothers, who are also involved in Banstead Athletic amateur football club in Surrey.
As the CVA details were released, Mr Green released a statement on the Rangers website. He said: "Today is an extremely important milestone for Rangers to begin the journey back to where the club belongs - as a leading sporting institution that can hold its head high both on the field and off it.
"I have great sympathy with creditors, particularly small local businesses in the community around Ibrox, who have suffered in the lead up to administration. However, I fervently hope that creditors will form the view that the best interests of everyone will be served by Rangers continuing as the successful club it is and recovering as a business in the forthcoming seasons. The consortium I am leading can only do so much to heal the wounds of the past, but we can do something about the future and that is where our main focus must lie. I hope creditors will approve this proposal and we can begin the task of rebuilding Rangers in earnest."
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