Hearts majority shareholder UBIG enters bankruptcy in Lithuania
Appointment of administrators to former parent company raises hopes of agreeing CVA.
The former parent company of Heart of Midlothian has begun bankruptcy proceedings in Lithuania – raising hopes of agreeing a CVA at the Edinburgh club.
Ukio Banko Investicine Grupe (UBIG) had administrators appointed by Kaunas District Court on Thursday after they signalled insolvency to the authorities in May.
The move was reported in Lithuanian news outlet Verslo Zinios.
Court public relations officer Gintare Vezelyte-Putnikiene is quoted: “UBIG has been declared bankrupt and a bankruptcy trustee has been appointed.”
The holding company, part of Vladimir Romanov’s collapsed business empire, had its assets frozen in April as the Russian-born banker was investigated.
That meant discussions between Hearts administrators, BDO, and UBIG could not take place until now.
UBIG holds the 50% stake in Hearts that will be key to the capital club exiting administration. UBIG is owed £10m by the Tynecastle outfit and will have to give their blessing to any cash settlement.
UBIG has ten days to appeal the appointment of UAB Insolvensa as administrators and Hearts joint administrator Bryan Jackson expects that could delay matters.
He said "I was told on Thursday that it is happening, but things aren't that straightforward. It will probably be appealed and that would mean it will be delayed.
"It does mean that the process has started though, so that is good news."
Ukio Bankas owns a 29.9% stake in Hearts, plus rights to Tynecastle Stadium, and is owed £15m. The bank is already undergoing bankruptcy proceedings.
BDO is sizing up three offers for Hearts, with fan-backed Foundation of Hearts believed to be leading the race.
Foundation chairman Ian Murray told STV that UBIG entering bankruptcy would provide clarity on Hearts’ future.
He said: “It’s bad news for UBIG but will provide some clarity around decisions on selling their shares in Hearts. The process is crystallising and that’s good news.”
Angelo Massone’s Five Stars Football is thought to have put up the largest sum to pay a CVA and remains in the race for the club.
The other bid, HMFC Ltd fronted by Bob Jamieson and backed from the United States, is understood to be the outside bet to gain control, and may drop out of the process in the next week.