Rangers crisis: Blue Knights claim Ibrox club has 'run out of time'

Rangers: The Blue Knights have withdrawn their bid for the club.© SNS Group

The Blue Knights and Brian Kennedy have withdrawn their bid to buy Rangers claiming time has run out for the club.

Former Ibrox director Paul Murray, who was fronting the group, told a media conference they had pulled out of the process after weeks of negotiations.

On Friday Mr Murray and Sale Sharks Rugby Union owner Mr Kennedy claimed that they had lined up former Rangers players and managers Walter Smith and Graeme Souness to help run the footballing operations at Ibrox.

The two men's account was denounced as "grossly misleading" in an angry statement by the club's administrators Duff and Phelps.

Joint administrator David Whitehouse said: "The fundamental reason we could not proceed with the Blue Knights/Ticketus combination was that we were advised there was not agreement within the consortium in relation to the funding of their bid."

Rangers manager Ally McCoist earlier said that Duff and Phelps had told him they were "very close" to naming a preferred bidder.

Mr Kennedy claimed their final bid was valued at £11m in total and was made up of £5.5m cash up front for the creditors and securing owner Craig Whyte's share. The rest of their bid consisted of a potential £2m dependant on European football participation and the acquiring of £3.5m of the club's vast debt.

'Absolute crisis'

Mr Murray said: "This is now an absolute crisis, time has now run out. Someone out there had better have a more credible bid than we have.

"We see the only way forward for the club is to effect a CVA and unfortunately time has run out. There is no time left to effect a successful CVA and to exit the club in a healthy capacity from that process. We told Duff and Phelps that on a number of occasions.

"The process has gone on far, far too long for various reasons. We told them last night they had until midday today to come back to us. They came back and wanted more time. They claim to have another interested party."

According to Duff and Phelps, £3.5m of the £5.5m package came from the club's debtors and would be available to any bidder.

Mr Whitehouse added that the bid structure was dependent on Rangers reaching the latter stages of the Champions League, which the club is ineligible to compete in next season.

He said: "We therefore find it extraordinary and very disappointing that Mr Kennedy in particular should assert that the amount being offered is irrelevant.

"Time and again he and others have been afforded the opportunity to become the best bid in play and it has not happened.

"We have a statutory duty to accept the best bid that is deliverable. The bid should also be commercially better than the liquidation of the business.

"We firmly believe the best interests of the club would be served by all involved in the process respecting the bidding process.”

CVA condition

The Blue Knights bid included a condition that creditors agreed to a company voluntary agreement (CVA) and Mr Whyte sold his 85% stake in the club to them.

Mr Kennedy claimed he had travelled to Mr Whyte's Scottish residence in Grantown-on-Spey last week where the Rangers owner signed a letter agreeing to sell him his shares. However, he admitted that HM Revenue and Customs, who are the club's largest creditor, had not given any guarantees that they would accept a CVA.

Mr Kennedy said his legal advisers Walker Morris had informed him that Mr Whyte's holding of a floating charge over the assets of the club through parent company Rangers FC Group "would not be an issue" to their takeover.

The pair claimed that because the administrators had not given them preferred bidder status by noon, their offer now no longer stood and they would not be taking part in the race for the club that owes up to £134m.

Mr Murray added: "We said we hoped they have made the right choice. We really hope this time they have got it right because if they haven't the future is pretty bleak."

Mr Kennedy said: "The administrators better have somebody good, some good credible consortium who is fully funded. This is not about us owning Rangers Football Club. It's about Rangers Football Club surviving.

"I'd be delighted if Duff and Phelps are able to pull one out of the hat and come up with a fantastic bidder. I fear they may not be able to do that."

Big tax case 'irrelevant'

Mr Kennedy claimed that the £75m big tax case Rangers are facing, which relates to the club's use of an employee benefit trust (EBT) scheme to pay players and staff between 2001 and 2010, was "irrelevant" because the debt would be added to the creditors' pot in a CVA.

Mr Kennedy claimed that current Rangers owner Mr Whyte, who has been banned for life from participating in Scottish football for his role in the club's financial meltdown, had been "vilified" in the media but he "wants Rangers to survive and agreed to give me his shares."

Both accused Duff and Phelps of "spin" in relation to the bidding process, which is still unresolved almost 90 days since administrators Paul Clark and David Whitehouse were appointed on February 14.

The Blue Knights' withdrawal comes after last week American tow-truck businessman Bill Miller was named preferred bidder by the administrators, before he pulled out citing issues with the amount of investment required in the club.

Administrators now appear to be left with two bids, one from an unnamed overseas group and one London-based led by former Sheffield United chief executive Charles Green. Mr Murray said during the press conference that the businessman was an "interesting guy" after doing half an hour of due diligence on him.

The Blue Knights consisted of coach business owner Douglas Park and his family, debt recovery specialist Paul MacKenzie, property dealer Scott Murdoch and businessman Ian Harte, while Mr Kennedy said he had planned to draft in Scottish Rugby Union chief executive Gordon McKie to run the club.

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