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Hearts to begin CVA 24 October 2013

Administrators of embattled football club Heart of Midlothian have announced they will begin a company voluntary arrangement process (CVA) to take the club out of administration.

BDO has been given permission to start negotiating a CVA with the club’s creditors, after administrators of Ukio Bankas, which controls around 30% of the club’s shares, gave their approval for the process to begin.

Bryan Jackson, BDO business restructuring partner, said: “This is positive news as it means that we can progress the CVA process immediately by initiating meetings of the creditors and shareholders.

“We will also be able to begin the formal acceptance of the Foundation of Hearts bid and legally agree terms.”

“I would urge caution however that, although this is a further step in the right direction, there is still some way to go. There are a number of issues to be clarified and concerns addressed but we are at least progressing once more.”

Hearts entered administration in June [LINK], as total claims by creditors of the club amounted to £28.4m, the majority of which is owed to the collapsed Lithuanian companies of former owner Vladimir Romanov.
The club also owes £15.5m to Ukio Bankas, which was declared bankrupt in June. Ukio Bankas holds the club’s stadium, Tynecastle, as security against the debt.

A CVA agreement was dependent on the approval of administrators, due to the £24m debt owed to shareholders Ukio Bankas and UBIG.

In August, fan group Foundation of Hearts (FoH) was named as the preferred bidder for the club. [LINK]

Bryan said: “Although I am sure the fans are sick of hearing this, I cannot stress enough how important it is that they continue their extraordinary support for their club.

“We still need to keep fans coming to matches, and money flowing through the club to ensure that we have sufficient funds to push the CVA process forward.”



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