Source: PA
New share issue could strengthen Romanov
Vladimir Romanov's position as Hearts majority shareholder could be strengthened further if a debt-for-equity proposal which will wipe out £10million of debt is agreed next month.
Ukio Banko Investicine Grupe - the Lithuanian bank in which Romanov has a controlling interest - could swap £10m of debt into 100,000,000 shares in Hearts at 10 pence per share if club shareholders approve the plan at a November 11 Extraordinary General Meeting.
Hearts' last reported debt was £34.78m, meaning the scheme, if approved, would reduce the debt by almost a third. UBIG currently owns directly, and controls indirectly via HoM 2005 - a company set up and owned 100% by UBIG - 44,605,409 ordinary shares representing 95.07% of the existing ordinary shares.
This would increase to a total share of 98.42% should the proposal be accepted, with UBIG owning 138,063,747 shares (93.97%) and HoM 2005 6,541,662 (4.45%). The capital conversion would also strengthen Hearts' position in readiness for UEFA's pending financial fair play regulations, while removing £500,000 annual interest and accelerating the club closer to profitability.
Hearts chairman Roman Romanov, the son of Vladimir, said: "The directors of Hearts are pleased to inform shareholders that an agreement has now been reached with UBIG, conditional upon passing of the resolutions, to remove a further £10 million of the current debt owed to UBIG by converting it into ordinary shares.
"As before, in 2008 when the company reached an agreement with UBIG to convert £12 million of debt into equity, this will strengthen the company's capital position in keeping with UBIG's strategy for Hearts, whilst removing a considerable amount of the company's short term liabilities."
