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Last Updated: Wednesday, 1 September, 2004, 10:36 GMT 11:36 UK
Rangers to raise 57m
Rangers owner David Murray
David Murray wants to tackle debts of nearly 80m
Returning Rangers chairman David Murray has confirmed a 57m rights issue of shares designed to wipe out most of the club's crippling debt burden.

John McClelland, as expected, drops down to vice-chairman.

The new chairman's company, Murray International Holdings Ltd, which last week acquired 8.7m shares from ENIC, will underwrite the rights issue.

"Given the increased commitment, I feel it's my responsibility to take the reins once more," Murray said.

Rangers, dominant in the 1990s, have lost the Scottish title to Celtic in three of the last four seasons and the passing of Tuesday's transfer deadline without a big-name arrival confirmed that the Ibrox club can no longer afford to wheel and deal at the top level.

Murray said: "John and the management team have performed well during the past two years under challenging market conditions.

The rights issue is not intended to generate surplus cash at this stage for investment in the playing squad
Rangers chairman David Murray
"My time as honorary chairman has, as I intended, allowed me to focus on and help improve the performance of the Murray Group."

He had stood down, becoming honorary chairman, in 2002, saying that he had become disillusioned by wrangling within the Scottish Premier League.

Now he was looking to personally tackle a debt of nearly 80m for which he has taken a large portion of blame.

"I am, of course, well aware of the current financial position at the club," said Murray.

"The board has been considering the principle of fund-raising for some time and, following my recent acquisition of ENIC's shareholding in the club, I now feel the time is right to move matters forward.

"The proposed rights issue will remove a substantial element of the long-term debt so that we can improve all aspects of the club's performance.

"I have, however, consistently stressed that we will no longer be net spenders in the transfer market and the rights issue is not intended to generate surplus cash at this stage for investment in the playing squad.

"The new funding will ensure the ability to re-invest cash generated from future operations which would otherwise have gone to service and repay historic debt.

"I understand this has been a difficult and frustrating period for everyone who supports Rangers.

"We have, at times, been accused of over ambition and we were unfortunate that the majority of the long-term debt was incurred by investment in the playing squad when transfer values and player wages were grossly over-inflated by the promise of media revenues which failed to materialise.

"At the same time, recognising the unsustainability of that level of expenditure, our investment in Murray Park, although adding to the debt, has provided us with the opportunity to develop home-grown talent at our own centre of excellence.

"The introduction of Alan Hutton and Chris Burke as regulars in the first-team squad is early evidence that this strategy is beginning to pay dividends.

"This announcement heralds the beginning of a new chapter in Rangers' history."

MIH will underwrite the share issue up to a level of 50m, shareholders having the right to subscribe for one new share for each existing share held in Rangers at a price of 1 per share.

Rangers' board is also considering whether to allow existing shareholders to increase their entitlement or to allow new subscribers.





SEE ALSO
Murray returns as chairman
27 Aug 04  |  Rangers
Gers consider rights issue
04 May 04  |  Rangers
Murray still Rangers' best hope
18 Jan 04  |  Rangers
Murray takes Ibrox blame
16 Jan 04  |  Rangers



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