UK Consortium Makes Bid

[Chris Benoit]

 

 

Why would be hit with penalty points for an insolvency event when we've never actually suffered an insolvency event?

That doesn't make any sense to me.

 

That's because it isn't true

[Poseidon]

I'm thinking out loud here but if debt is say ?30m and a 20p intthe ? CVA is the best offer then there's ?6m in the pot. As Ukio are first in line with securities then they'd pocket the lot and everyone else including Ubig get zero. They'd obviously never go for that so either Ukio need paid up and enough still needs to be in the pot for Ubig to be happy or its a rejected CVA and liquidation?

 

Is that right?

 

If so we are screwed unless someone first does a deal for Ukio shareholding and securities THEN tries to cut a CVA deal with Ubig.

 

I really hope what I've posted is a lot of nonsense....

 

 

[manaliveits105]

 

Cos ROD PETR15 is on the committee

[Geoff Kilpatrick]

 

 

Due to debt owed to Ukio from Ubig i think Ukio will be running the show

UBIG still have the power of veto.

[Charlie-Brown]

I think this group might be trying to steal a march on rival bids and get preferred bidder status early in the game.

[babertonjambo]

Due to debt owed to Ukio from Ubig i think Ukio will be running the show

 

This.

 

Did someone not mention recently that UBIG had pledged all of their 'assets' to UKIO as security for their loans?

[mattyw_1874]

[mattyw_1874]

Evening News Sport ?@edinburghsport1m

New bid for Hearts being headed by Stephen Paterson and Fraser Kerr of Haines Watts accountants. All invloved are Hearts fans

[The Godfather]

 

I think this group might be trying to steal a march on rival bids and get preferred bidder status statically in the game.

 

Of course and who's to say they've not being doing dillegence for some time and been in contact with Ubig long before recent events.

[hughesie27]

I'm thinking out loud here but if debt is say ?30m and a 20p intthe ? CVA is the best offer then there's ?6m in the pot. As Ukio are first in line with securities then they'd pocket the lot and everyone else including Ubig get zero. They'd obviously never go for that so either Ukio need paid up and enough still needs to be in the pot for Ubig to be happy or its a rejected CVA and liquidation?

 

Is that right?

 

If so we are screwed unless someone first does a deal for Ukio shareholding and securities THEN tries to cut a CVA deal with Ubig.

 

I really hope what I've posted is a lot of nonsense....

 

No

 

Say we have ?30 million debt.

 

?15million UKIO

?10 Million UBIG

?5Million Other

 

If as you say we had a 20p in the ? deal then the ?6 million would be divided up as follows.

 

50% of debt due to UKIO so they get ?3 million

33% of debt due to UBIG who get ?2 million

16.5% of Debt due to Other who get ?1 Million

 

For the CVA to be agreed we need 75% of the debt owed to vote for the CVA.

 

So that means both UKIO and UBIG must agree on a CVA deal for us to avoid liquidation.

[mattyw_1874]

http://www.scotsman.com/edinburgh-evening-news/football/hearts/hearts-in-administration-new-bid-made-for-club-1-2971167

[Paolo]

I think in theory, if things were done quick enough, we could avoid admin. Time is not on our side, though, and I do not think it is likely in reality.

 

In theory, though - we could offer a CVA outwith admin, effectively offering to settle the debt at a reduced rate. UKIO and UBIG, or their administrators would have to accept this, and as we are not in admin, our other creditors would be due payment in full.

 

Maybe, the buyers can afford to pay off all our other debts in full, particuallry to HMRC. As we are not in admin, we do not need to treat all creditors equally, as any reduced payment will be agreed individualy between the club and the creditor. And back to HMRC, they do not agree to CVAs when a company is in admin, but they have reguarly accepted reduced payment as final settlement, and if it would be more than they would get in a formal CVA, it could, in theory be appealling. So we hace debt cleared, and avioded admin,

 

Unfortunately, I think there is too little time for that.

[Jam Tarts 1874]

 

Evening News Sport ?@edinburghsport1m

New bid for Hearts being headed by Stephen Paterson and Fraser Kerr of Haines Watts accountants. All invloved are Hearts fans

 

At least these two guys know what they are talking about, I just pray that their consortium has enough cash.

[Jamboelite]

pity they couldn't prevent admin

 

No one in their right mind would buy us in the position we were in when admin was right on the doorstep.

 

If they did then I would already think they arent sensible business people.

[Franklin Delano Bluth]

Stephen Paterson

 

Stephen joined Haines Watts this year as Corporate Finance Director based in Edinburgh. He has nearly 30 years experience in the corporate financial sector and has spent most of his career in industry and commerce holding various key Financial Director positions in businesses with turnovers up to ?100 million. His executive ability to advise and assist on a diverse range of financial business complexities culminated in his earning the prestigious award of Financial Director of the Year in 2000.

 

Originally qualifying in 1982 with a big four firm, Stephen quickly gained a wealth of ?hands on? experience with major acquisitions, disposals, due diligence and management buyouts. Moreover, he has raised bank funding from the majority of UK banks as well as funding from the private equity sector.

 

Stephen?s proven financial expertise and astute understanding of the commercial sector ensures he is particularly well-equipped to advise on fast growth companies, turnarounds, corporate restructurings and startups.

 

On a personal note, Stephen lives in Edinburgh and is married with three children. His interests outside work include football, rugby and golf. He is also an active member of the Merchant Company and Trustee of the Melville College Trust.

 

Fraser Kerr

 

Fraser has been the managing partner of the Edinburgh office since 2002. He has been instrumental in the growth of the Scottish Haines Watts business through both organically and serial mergers, expanding the office presence into Fife and creating some of the best specialist departments in Scotland.

 

Fraser's depth of experience comes from over 30 years working with a wide spectrum of business sectors from manufacturing, property to professional firms. He prides himself on spotting opportunities to take businesses to a new level of growth and profit by looking beyond the numbers. By providing financial and strategic advice on the business lifecycle, Fraser has helped create a few millionaires along the way.

 

After 10 years honing his skills with several practices, Fraser launched his own Edinburgh-based firm Fraser Kerr & Co in 1988. Having managed and grown his own business for over 20 years, he can appreciate the pressures and stresses of modern business both professionally and personally. It is Fraser?s forward-thinking approach to positioning business that has ensured his own success as well as his clients.

 

Fraser's strengths lie in Strategic Planning, Profit Improvement, Tax Planning, Raising Finance, Business Acquisitions and Disposals.

 

Fraser also acts as a non executive director of several companies in and around Edinburgh.

 

Fraser is a keen follower of football and still manages to kick a ball around a six aside court on a regular basis.

[Poseidon]

 

 

No

 

Say we have ?30 million debt.

 

?15million UKIO

?10 Million UBIG

?5Million Other

 

50% of debt due to UKIO so they get ?3 million

33% of debt due to UBIG who get ?2 million

16.5% of Debt due to Other who get ?1 Million

Ok, good stuff, I wasn't sure if the securities changed it in some way

[Midloth_Iain]

http://www.scotsman....-club-1-2971167

 

A UK-BASED consortium has lodged a ?meaningful? takeover bid for Hearts with Ukio Bankas administrators in Lithuania.

 

 

The proposal is from a group of six wealthy businessmen and includes a draft Creditors? Voluntary Arrangement to help the Edinburgh club out of administration. Ukio administrators Valentas UAB have indicated they would accept the CVA. Valnetas officials were due to meet last night to discuss the offer in depth after it was submitted on Monday evening. Ukio Bankas are to be liquidated but are owed ?15million by Hearts and are the club?s biggest creditors ahead of Ukio Bankas Investment Group (UBIG), who are due ?10m. Hearts stated their intention to enter administration on Monday with tax and player salaries unpaid and funding dried up on top of the combined ?25m debts.

The consortium behind the new bid do not wish to be named at this stage. They are fronted by Edinburgh businessmen Stephen Paterson and Fraser Kerr of Haines Watts accountants. They claim to have been in discussions with Ukio administrators for several weeks and to have already provided evidence of their financial backing.

Paterson, a corporate finance restructuring expert, would not confirm the value of the consortium?s offer but said it was ?meaningful? and that the people involved are Hearts fans. ?We are acting for clients who don?t wish to be named at this moment but they are Hearts-minded,? he told the Evening News today. ?The bid is for everything, it?s not about splitting the ground from the team or anything. We want the club, the players, the ground, everything.

?The Lithuanian administrator has indicated he will vote for our CVA, albeit with a 15-point penalty for Hearts for entering administration. It is up to the administrator at Hearts to go through that process. Our bid is predicated on a CVA

happening.? A CVA would see both Ukio and UBIG recoup part of the money owed to them and leave Hearts free of the ?25m they owe. A total of 75 per cent of creditors must agree to a CVA for any company to exit administration. However, the situation cannot move on much further until administrators are formally appointed.

?I know things are dark right now for the Hearts support but we will emerge from this stronger and healthier,? continued Paterson. ?It?s doom and gloom for the Hearts fans but administration had to happen. Now it?s happened, let?s move on. Being a Hearts fan myself, I desperately tried to come up with a solution to avoid the 15-point penalty but I could not come up with one. You would need to go through what I?d call a cleansing process to strip that debt away, which is quite frankly unbelievable. The more we looked at it, we weren?t sure that was all the debt.?

The consortium in question would wish to run Hearts themselves if they ultimately gained control. However, they are open to working with the fans? umbrella group Foundation of Hearts and having fan representation on the club?s board.

?The investors most certainly want to work with the Foundation,? said Paterson. ?They just want to make the club safe, run it properly and give the fans representation on the board. The club would be run on proper commercial grounds but the fans would be represented.?

Other interested parties are considering offers for Hearts but the UK-based consortium would appear to be best placed at the moment. A ?500,000 offer from a Scandinavian group was reported to have been rejected by officials at Tynecastle before they signalled their intent to enter administration on Monday. A consortium in London and an American group are also in the running.

Hearts have incurred a delay in appointing their own administrators because Valnetas are contesting the club?s intention to put KPMG in control. Valnetas prefer BDO and are expected to lodge papers at Edinburgh?s Court of Session to ensure their own men oversee the administration process.

That could threaten the safety of the stadium, which Ukio Bankas administrators have control of due to a ?6.8m floating charge which is security against the ?15m Hearts owe the bank. Ukio Bankas hold a 29.9 per cent shareholding in Hearts, whilst UBIG hold 50 per cent.

Gintaras Adomonis, general director of Valnetas, said: ?We thoroughly analysed (the) financial and legal framework of Hearts? case and, taking into account failure by Hearts to cover the debt to HMRC, it appeared that administration of the club is the only option.

?We still believe that we should stay with our ultimate goal to defend the interest of the creditors of Ukio Bankas and sell the club to the appropriate investor as soon as possible. Thus, we want the administrator to be not only experienced but dedicated to football as well.?

[Ribble]

pity they couldn't prevent admin

 

True but it would take at least 500k to prevent admin today, 500k in a CVA of say 10-20p in the pound could cover ?2.5-?5m of our debts!

[Armageddon]

 

... or ....

 

 

 

I'm keeping an open mind.

 

The Scandinavians love a Brazilian ...

[The Gasman]

Someone go rattle Gasmans cage.

 

[Francis Albert]

No one in their right mind would buy us in the position we were in when admin was right on the doorstep.

 

If they did then I would already think they arent sensible business people.

If you could buy it for the same price why wouldn't you do it before administration? To dodge your creditors? OK let's repeat the exercise annually.

[HMFC-1874]

I think in theory, if things were done quick enough, we could avoid admin. Time is not on our side, though, and I do not think it is likely in reality.

 

In theory, though - we could offer a CVA outwith admin, effectively offering to settle the debt at a reduced rate. UKIO and UBIG, or their administrators would have to accept this, and as we are not in admin, our other creditors would be due payment in full.

 

Maybe, the buyers can afford to pay off all our other debts in full, particuallry to HMRC. As we are not in admin, we do not need to treat all creditors equally, as any reduced payment will be agreed individualy between the club and the creditor. And back to HMRC, they do not agree to CVAs when a company is in admin, but they have reguarly accepted reduced payment as final settlement, and if it would be more than they would get in a formal CVA, it could, in theory be appealling. So we hace debt cleared, and avioded admin,

 

Unfortunately, I think there is too little time for that.

 

but we have already applied to go into administration, so I'm sure before anything happen, that hearts have to go in administration as we have lodged the paper work to the courts, no?

[Mad Dog Frazer]

A UK-BASED consortium has lodged a ?meaningful? takeover bid for Hearts with Ukio Bankas administrators in Lithuania.

 

 

The proposal is from a group of six wealthy businessmen and includes a draft Creditors? Voluntary Arrangement to help the Edinburgh club out of administration. Ukio administrators Valentas UAB have indicated they would accept the CVA. Valnetas officials were due to meet last night to discuss the offer in depth after it was submitted on Monday evening. Ukio Bankas are to be liquidated but are owed ?15million by Hearts and are the club?s biggest creditors ahead of Ukio Bankas Investment Group (UBIG), who are due ?10m. Hearts stated their intention to enter administration on Monday with tax and player salaries unpaid and funding dried up on top of the combined ?25m debts.

 

The consortium behind the new bid do not wish to be named at this stage. They are fronted by Edinburgh businessmen Stephen Paterson and Fraser Kerr of Haines Watts accountants. They claim to have been in discussions with Ukio administrators for several weeks and to have already provided evidence of their financial backing.

 

Paterson, a corporate finance restructuring expert, would not confirm the value of the consortium?s offer but said it was ?meaningful? and that the people involved are Hearts fans. ?We are acting for clients who don?t wish to be named at this moment but they are Hearts-minded,? he told the Evening News today. ?The bid is for everything, it?s not about splitting the ground from the team or anything. We want the club, the players, the ground, everything.

 

?The Lithuanian administrator has indicated he will vote for our CVA, albeit with a 15-point penalty for Hearts for entering administration. It is up to the administrator at Hearts to go through that process. Our bid is predicated on a CVA

 

happening.? A CVA would see both Ukio and UBIG recoup part of the money owed to them and leave Hearts free of the ?25m they owe. A total of 75 per cent of creditors must agree to a CVA for any company to exit administration. However, the situation cannot move on much further until administrators are formally appointed.

 

?I know things are dark right now for the Hearts support but we will emerge from this stronger and healthier,? continued Paterson. ?It?s doom and gloom for the Hearts fans but administration had to happen. Now it?s happened, let?s move on. Being a Hearts fan myself, I desperately tried to come up with a solution to avoid the 15-point penalty but I could not come up with one. You would need to go through what I?d call a cleansing process to strip that debt away, which is quite frankly unbelievable. The more we looked at it, we weren?t sure that was all the debt.?

 

The consortium in question would wish to run Hearts themselves if they ultimately gained control. However, they are open to working with the fans? umbrella group Foundation of Hearts and having fan representation on the club?s board.

 

?The investors most certainly want to work with the Foundation,? said Paterson. ?They just want to make the club safe, run it properly and give the fans representation on the board. The club would be run on proper commercial grounds but the fans would be represented.?

 

Other interested parties are considering offers for Hearts but the UK-based consortium would appear to be best placed at the moment. A ?500,000 offer from a Scandinavian group was reported to have been rejected by officials at Tynecastle before they signalled their intent to enter administration on Monday. A consortium in London and an American group are also in the running.

 

Hearts have incurred a delay in appointing their own administrators because Valnetas are contesting the club?s intention to put KPMG in control. Valnetas prefer BDO and are expected to lodge papers at Edinburgh?s Court of Session to ensure their own men oversee the administration process.

 

That could threaten the safety of the stadium, which Ukio Bankas administrators have control of due to a ?6.8m floating charge which is security against the ?15m Hearts owe the bank. Ukio Bankas hold a 29.9 per cent shareholding in Hearts, whilst UBIG hold 50 per cent.

 

Gintaras Adomonis, general director of Valnetas, said: ?We thoroughly analysed (the) financial and legal framework of Hearts? case and, taking into account failure by Hearts to cover the debt to HMRC, it appeared that administration of the club is the only option.

 

?We still believe that we should stay with our ultimate goal to defend the interest of the creditors of Ukio Bankas and sell the club to the appropriate investor as soon as possible. Thus, we want the administrator to be not only experienced but dedicated to football as well.?

[Diego10]

I'm thinking out loud here but if debt is say ?30m and a 20p intthe ? CVA is the best offer then there's ?6m in the pot. As Ukio are first in line with securities then they'd pocket the lot and everyone else including Ubig get zero. They'd obviously never go for that so either Ukio need paid up and enough still needs to be in the pot for Ubig to be happy or its a rejected CVA and liquidation?

 

Is that right?

 

If so we are screwed unless someone first does a deal for Ukio shareholding and securities THEN tries to cut a CVA deal with Ubig.

 

I really hope what I've posted is a lot of nonsense....

UBIG are going to get next to nothing whatever happens, whether through admin or liquidation, unless someone bids way over the value of the ground. them refusing a CVA is possible but pretty much pointless.

[1874robbo]

The guys spearheading this group are accountants so i think they'd have done their homework before entering any possible bid.

[Poseidon]

 

 

That's because it isn't true

The rules seem pretty black and white

[Paolo]

but we have already applied to go into administration, so I'm sure before anything happen, that hearts have to go in administration as we have lodged the paper work to the courts, no?

 

I think it is not approved yet, so we are not in admin. They could buy the club, appoint a board and withdraw the application - I think! Not enough time though.

 

EDIT - I think their bid is based on admin though.

[Francis Albert]

Is this the group that includes a committee member of HMYDC, one of the "united" FoH.

[Geoff Kilpatrick]

 

UBIG are going to get next to nothing whatever happens, whether through admin or liquidation, unless someone bids way over the value of the ground. them refusing a CVA is possible but pretty much pointless.

Pointless?

 

Their vote makes or breaks the club's future!

[Diego10]

Pointless?

 

Their vote makes or breaks the club's future!

I said it was pointless them refusing a CVA. they're getting no cash from a liquidation.

[maxjambo98]

I was once interviewed by Fraser Kerr for a job with Haines Watts. Didn't take long for the interview to turn to the subject of Hearts, he was clearly a real Hearts man. Would be delighted if he took over. A successful businessman with the clubs best interests at heart. He'll also have a good understanding of the administration process given the business he's in.

 

Wish I'd taken the job now could have been in line for a place on the board!

[TheBigO]

The guys spearheading this group are accountants so i think they'd have done their homework before entering any possible bid.

 

And maybe even know more about this type of thing that most of us!!

 

Hopefully!

[Paolo]

In reality, we have very little information from all 'credible' parties. This, though, is the most impressive introduction, in my opinion - assuming it is accurate, of course.

[pivotno1]

sounds really positive

[Mad Dog Frazer]

Meaningful?

[Franklin Delano Bluth]

MAD PATERSON OOT. MAD KERR OOT.

 

KILLIN' THE CLUB EVERYDAY LIKESAY.

 

Just to get that in there early.

[Alwaysinourshadows]

These guys seem like the real deal

[Footballfirst]

Is this the group that includes a committee member of HMYDC, one of the "united" FoH.

 

Yes. Fraser Kerr is a member of HYDC

[Hugh Phamism]

No

 

Say we have ?30 million debt.

 

?15million UKIO

?10 Million UBIG

?5Million Other

 

If as you say we had a 20p in the ? deal then the ?6 million would be divided up as follows.

 

50% of debt due to UKIO so they get ?3 million

33% of debt due to UBIG who get ?2 million

16.5% of Debt due to Other who get ?1 Million

 

For the CVA to be agreed we need 75% of the debt owed to vote for the CVA.

 

So that means both UKIO and UBIG must agree on a CVA deal for us to avoid liquidation.

 

I am probably wrong on this, but is it only unsecured Creditors who vote on the CVA?.

 

My understanding is that Ukio are a secured creditor and the stadium is part of that security.

[Francis Albert]

 

 

 

Yes. Fraser Kerr is a member of HYDC

 

Strange. Yet the united FoH keep telling us they are the only show in town. Maybe they meant literally "in town"?

[Hansel]

Sounds promising.

[ELITHEDUG]

 

 

 

come on gas what's the hampden ?

[Craigieboy]

[hughesie27]

Meaningful?

 

More than ?450k

[Craigieboy]

dp

[Diego10]

the most positive thing there is the statement that the administrator of UKIO has indicated a willingness to support the proposed CVA. if, as stated, there's something in the pot for UBIG as well, then that could swing it.

[ERjambo]

 

Kickback will be very quiet post takeover and no mad vlad what will we talk about ?

 

Hibs? Until they go bust at least!

[Geoff Kilpatrick]

 

I said it was pointless them refusing a CVA. they're getting no cash from a liquidation.

If we are talking about pure money then yes. However, like Hector at RFCRIP, we don't know what any administration process at UBIG is going to look like. As there is no chance of any money, there is the possibility that they will focus on obtaining forensic details of UBIG's ownership. Hopefully, that won't affect us but that is still the wildcard for me.

[GuitarJambo]

Im impresed by the fact that we havent heard anything of these guys yet but theyve been dealing with the UKIO admins for a few weeks now.

Shows that theyre serious and the fact they have presented a draft CVA shows exactly how serious they are.

 

I just hope this brings out a few other bidders for the club.

[Franklin Delano Bluth]

Just want Ukio and UBIG to get their shit together so this 'consortium' can get the ball rolling.