Administration at Rangers is 'almost a certainty'

By Mike Farrell
Rangers: The Ibrox club lodged papers with the Court of Session to confirm intention to appoint administrators.© STV

Administration is almost a certainty at Rangers, according to a financial expert.

The Ibrox club lodged a notice of intention to appoint an administrator at the Court of Session in Edinburgh at Monday lunchtime.

This comes as the club is facing a tax bill of "substantially more" than £50m in a case it is contesting with HM Revenue and Customs.

It now has ten working days in which to either reach an agreement with its creditors, or appoint an administrator, while it has already engaged restructuring firm Duff and Phelps.

Neil Patey, a partner at accounting firm Ernst and Young, believes the move made on Monday will most likely lead to administrators taking over Rangers, resulting in a number of employees being made redundant.

Mr Patey told STV News: "In theory they do not have to go into administration, but I don’t think they will reach an agreement with their creditors.

"I can’t see a situation where administration doesn’t happen now. Duff and Phelps will be getting into a position where, if they have to do something, they are ready to go into administration."

Mr Patey said once administration is formalised, the job cuts will begin at Ibrox as the club look to generate “cash resources” to pay off creditors.

He added: "Should Rangers agree a creditors voluntary agreement to come back out of administration, they will not lose SPL membership.

"But if the administrators do not agree a CVA, then they’ll have to liquidate the club and in that extreme case, Rangers would lose SPL membership.

"This would mean any relaunched Rangers would have to start again in the Scottish Third Division, which would have ramifications for the Sky TV deal as I understand there is a requirement in that contract that there are at least four Old Firm games a season. How would that be possible if Rangers had to start again?"

Mr Patey, a football finance expert, said that "backroom staff and surplus squad players" would be among the most likely to lose their jobs should Duff and Phelps take over the running of the club.

He also added that HMRC would be a "major player" in the agreement of any CVA by Rangers.