Why Rangers fans should vote in favour of Resolutions 10 and 11

Rangers International Football Club currently has an issued share capital of 81,478,201 ordinary shares of 1p each.

At the club AGM shareholders will be asked to vote in favour of two resolutions regarding the issuing of new shares.

Resolution 10 permits RIFC to offer further shares to existing shareholders in proportion to their existing holdings.  This could be via an open offer of up to 81,478,201 shares (10a) or via a rights issue of up to 108,637,601 shares (10b).

In both cases shares are generally offered to existing shareholders below current market price and the offer can either be accepted or refused. The main difference between 10a and 10b is that in a rights issue, the right to subscribe for shares can also be traded by existing shareholders.

Resolution 11 permits RIFC to offer shares to new shareholders without first offering them to existing shareholders either through a rights issue or an open offer.

If both resolutions were passed it would be for the Board to decide how many shares to issue to convert the existing investor debt and how many shares to offer to existing and/or new shareholders to raise new funds.

I would expect the Board to issue shares via an open offer to convert investor debt to equity and give existing shareholders the opportunity to invest on the same terms if both these resolutions are passed.

Passing Resolutions 10 and 11 will give the current board the ability to take the club forward.   It will allow them to convert debt to equity (far more preferable than paying back hard cash for loans) and to allocate new shares both to existing shareholders and new investors   At the same time, you will recall, the board has managed to freeze out allies of the old regime by disallowing votes from shareholders who fail to disclose the beneficial owners of shares - ie, Blue Pitch and Margarita Holdings.

The eventual terms of the share issue will not suit everyone - some will claim that existing smaller shareholders will have their shareholdings diluted - but I’m sure a mechanism will be found to get around that.  In any case, the directors and other fans who have loaned the club money are like those shareholders - both sets have played their parts in funding the club.   More was always going to be needed.  That’s the real world.

While the club is operating under harsh conditions - the recent revelations about the ludicrous terms grated to Sports Direct by the former board being but the latest scandal - fans will need to continue to play their part in funding via both ticket sales and share purchase.   It’s a partnership between ordinary punters and fans with big money.