Hearts’ Lithuanian owner Vladimir Romanov, according to The Scotsman, has warned that he may walk away from Scotland and put up Hearts for sale IF Edinburgh City Council and the UK Financial Regulators continue to stand in his way.
Romanov is embroiled in a fight with Edinburgh City Council over plans to develop Tynecastle, with him planning to develop a new 10,000 seat main stand. While he has spent more than three years and failing to get a banking licence for Ukio Bankas, as the UK Finance regulators have failed to grant him one.
Romanov’s spokesperson Sergejus Fedotovas told The Scotsman newspaper that his boss has invested £60 million into the city, including £23 million in taxes. But said that he is continually frustrated over his plans, raising questions over claims that Scotland is ‘open for business.’
Fedotovas, claimed that a health and safety ruling restricts the expansion of the stadium to 10 per cent of the current 17,200 capacity, which would make Romanov’s plans financially untenable. Romanov had planned on a 24,000-seater stadium, a plan that would cost around £51 million, and would have included a hotel and commercial space. But that original plan had already been scaled back.
Currently Tynecastle with an average attendance of 14,500, would not fulfil Romanov’s ambitions and that business plans and future earnings rely on improvements being made, which will bring in a bigger crowd.
However it looks as though Romanov is holding the council to ransom. Fedotovas states that the stand-off with the Council and the FSA, over the stadium and bank licence respectively, cannot continue indefinitely and that the whole project in danger of being frozen out.
“What would any intelligent business look at? We would definitely have to reassess our plans,” he said. “A decision may have to be taken to minimise our investment and just support the club, or to walk away by selling the club.”
He added, “Selling the club is an option because there is nothing that prohibits us from doing that. We are not discussing selling the club at present but if no one cares and no one is interested it could be an option.”
However a council spokesman said, “We are still in discussions with the Hearts board over their proposed redevelopment plans.”
The Financial Services Authority said securing a licence was a complicated business, but it did not comment on individual applications.
Ukio Banko Investicine Grupe (UBIG), Romanov’s investment company, last week agreed a debt for equity deal that has seen £10m wiped off Hearts’ debt, which has seen Romanov’s stake increase from 95 per cent to 98 per cent.
But despite taking over Hearts after Chris Robinson’s planned move away from Tynecastle cause protests from the fans, it now looks as though Romanov is seriously considering such a move also to a proposed sports arena on a green belt site in West Edinburgh. The new stadium proposed by Rangers owner Sir David Murray in the Hermiston area could see both Hearts and Edinburgh Rugby taking up residence at the stadium.
Hearts officials said that they are now ‘open-minded’ over such a move, but insist they will ‘exhaust every option’ for redeveloping it.
The Council are pushing for the club to make up its mind over whether they still wish to buy the former Tynecastle High School building, which Romanov had agreed to buy for £4 million, for future redevelopment of the stadium.
So the jist of it all is, if Romanov doesn’t get his way, as in the stadium expansion passed with no pressure from the council and his bank is awarded a licence, then he will walk away from Hearts, selling it.
The question is though with debts that dwarf Rangers and Celtic’s combined, who would buy Hearts at a much inflated price named by Romanov? He will not simply hand over the club to the fans nor a single investor for less money than he has put into the club, that’s for sure. And even if such buyer is found to meet Romanov’s valuation, they would also have to either take on the debt owed to Romanov’s banking group or pay it off.
In fact Romanov’s stance, which looks clearly like a case of blackmail, could ultimately end Hearts’ existence as a senior football club.
Source: The Scotsman