Rangers released a second share issue this year but what does it actually mean for the club?
Rangers’ share issue announcement shows something will need to change at the club – because the finances raised by their run in the Europa League is only going to stretch so far.
That’s according to one finance expert who sees parallels to the Jim Ratcliffe situation at Manchester United.
The Ibrox side announced an alarming loss of £17m back in October and are hoping a takeover led by American businessman Andrew Cavenagh and the 49ers investment group can inject some cash and help them back on track both on and off the pitch.
In the meantime, the club have released two share issues this year – the most recent for 26.7milion shares to the tune of £5.3m earlier this month – to help raise some cash in the meantime.
It’s nothing out of the ordinary, according to sport finance writer and analyst Stefan Borson – but does reckon it’s an obvious sign things aren’t going to plan, and need to change. Just like south of the border at Manchester United.
And he believes that while a deep run in Europe will help, it’s not going to plug the gap entirely.
He told Football Insider: “They’re going to need to just keep putting money in because they are loss-making.
“It’s similar to the Ratcliffe situation in terms of what he was saying about Man United. If you’re constantly burning cash and losing money, then of course to pay the bills, somebody’s got to put some cash in to give you working capital to be able to pay the wages and everything else, so it’s just going to keep going.
“If you’ve got no money and you’re loss making, then you’re going to see either equity come in, debt or some form of quasi equity or debt. It’s just the way it works. There is no option, so that’s just the way it is.
“It doesn’t signify anything, but it shows the need for a change of something. Otherwise, every year you’re just going to need millions of pounds to come in.
“As it happens, things like a quarter-finals of the Europa League over two legs, that’s going to pay some bills.
“When they get that check from Uefa, if they can get to the semi-final, it’s going to pay some more bills. If they get to the final, it’s going to pay some more, so that’s going to help. But even those things aren’t free because it’s not cheap to take 40 players to Turkey for a round of 16 game.
“Yes, you get your prize money from winning the tie, but it’s not like it’s cost free. There is cost in this stuff. It’s not pure profit and there is cost.
“Also, if you think about it from a cash flow perspective, they have to pay that upfront. The hotels and the flights are real. These are real costs that have to be paid and they don’t get the money for two months, so they’ve got this working capital gap.
“These are the realities of managing cash. If you’re a loss-making club, you need cash to be put in at the top to pay for the bills.”