LONDON (Alliance News) - Rangers International FC PLC Wednesday said Sports Direct International PLC had given up its naming rights to its Ibrox stadium, but Sports Direct Founder Mike Ashley's investment vehicle, Rangers third biggest shareholder, had to increase the company's credit facility as low attendances at matches further hit its finances.
Ashley's MASH Holdings Ltd investment vehicle has agreed to increase Rangers' credit facility by a further GBP1 million, taking the total sum available to GBP3 million.
"During the Autumn, the club has suffered from lower than expected match attendance which has exacerbated the financial condition of the business. The directors have begun a cost cutting exercise, but further working capital in addition to the facility will be needed before the end of the year," Rangers said in a statement.
MASH holds 8.92% of the voting rights in the Scottish football club, having bought nearly 4.3 million Rangers shares in a recent deal, more than doubling Ashley's stake. MASH also holds an indirect holdings in Rangers' subsidiary.
Ashley, founder and director of Sports Direct and owner of Newcastle United football club, succeeded last month in ousting two Rangers directors, including former Chief Executive Officer Graham Wallace and Executive Director Philip Nash.
A few days later, the club appointed David Somers as its interim executive chairman in order to oversee the recruitment of a new chief executive and finance director for the club. It also appointed Derek Llambias to its board as a non-executive director, a long-time friend and associate of Ashley.
In a separate statement Wednesday, Rangers said that Sports Direct has signed a deal giving up its naming rights to its Ibrox Stadium.
"The agreement consolidates existing marketing arrangements between the parties and results in a more normalised retail joint venture marketing arrangement in which Sports Direct will continue to have certain advertising rights," the company said in its statement.
Rangers shares were up 2.9% at 26.24 pence Wednesday morning, while shares in Sports Direct were trading 1.0% lower at 620.50 pence.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.
