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Rangers agrees £10mln financing deal with Sports Direct

Last updated: 08:37 27 Jan 2015 GMT, First published: 09:37 27 Jan 2015 GMT

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Rangers (LON:RFC) has confirmed it will receive £10mln of long term financing from Mike Ashley’s Sports Direct.

A loan of two halves will initially see £5mln made available immediately to satisfy working capital needs and enable the repayment of a £2mln loan to MASH Holdings, a Mike Ashley vehicle.

A further £5mln, repayable over five years, and will also be a source of working capital for the ailing Scottish football club.

Ashley owns some 9% of Rangers, but, is unable to acquire any more of the company due to a ruling by the Scottish Football Association.

However, as part of the new loans the sportswear magnate’s 55% owned Sports Direct business will acquire beneficial interests in the club assets. Ibrox Stadium, however, remains fully in the hands of the club.

The terms of the deal will see Sport Direct receive a 26% stake in the Rangers Retail Ltd, a joint venture that was already 49% owned by the retail group.

It also stipulates that future shirt sponsorship deals, from the 2017/18 seasons onwards, will be for the benefit of the Rangers Retail venture.

Rangers Retail, a profitable merchandising operation, will pay a £1.6mln dividend prior to the transfer of Sports Direct’s additional stake - though Rangers share of the proceeds will be paid to Sports Direct in connection with the cancellation of leases on unprofitable stores.  

Rangers training complex, car parks and registered trademarks are named as security to the loan. 

David Somers, Rangers non-executive chairman, in a statement said: "The board has sought for some time to establish a long term funding solution for the company in order to create a platform of stability to build for the future,” 

“This facility begins this process and we very much hope that it will be augmented with further permanent capital in due course.”

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