HEARTS have assured supporters that a new manager will be in place "shortly" in what is described as an "update from the board" on the club's official website.
There is precious little additional information on the imminent appointment, although the statement does promise to communicate through "tangible actions" rather than "hollow words".
The club's search for a new manager began at the start of January when the club released another statement to inform supporters that the search for a new manager had begun.
Stephen Frail assumed a 'caretaker' role and had been set to fulfil an assistant's position next to the new manager, who, it was stressed, would preferably have had experience of working in British football. Seven months later Frail has been put on gardening leave and still no manager has been appointed, although Mark McGhee, the Motherwell manager, turned down an approach from Hearts owner Vladimir Romanov earlier in the summer. Also said to have been targeted by Romanov were Bratislava Artmedia coach Vladimir Weiss and Jurgen Rober, formerly of Hertha Berlin. But they, too, have resisted the offer to take over at Tynecastle.
With the new Scottish Premier League season now just over a month away speed is of the essence and the Hearts board is confident that an appointment will be made soon.
"A team manager will be appointed shortly and the board of directors is confident that this manager should improve the situation on the pitch," said the statement. "The board is taking all necessary actions so that the right appointment is made."
At the club's agm in April chairman Roman Romanov asked fans to give Frail a chance in the long-term, and added that it was "very difficult" to find a new manager. The last comment has been proved very true, with few fans then believing that the club would still be without a manager by the start of pre-season training – as was the case.
But fans have been urged to judge the board based on actions and not words. Despite the working relationship between Vladimir Romanov and his spokesman Charlie Mann having recently come to an end the statement has assured fans they will be kept informed of each new development at the club. Mann cited a lack of communication between Romanov and the club's supporters as a reason for ending his association with the Lithuanian-based businessman.
"The board of directors states its desire to communicate through tangible actions, not hollow words," the statement said. "Supporters will be able to judge the board based on actions, which is how it should be.
"As each step is completed supporters can be assured that full information will be announced – direct to supporters. The club will continue to implement the right decisions despite criticism from the sceptics."
How the debt for equity conversion will work at Tynecastle
ANALYSISA 'DEBT for equity' conversion works by doing exactly what it says. Debt is paid off in exchange for shares in the company. In other words, part of the company is given away.
The shares that are transferred in exchange for debt are new shares, meaning that the total number of issued shares increases. This dilutes existing shareholdings, but in Hearts' case, this does not matter. Vladimir Romanov controls the club with a majority shareholding already, and any other parties have a tiny minority interest. And it is on the same basis that the proposal will be passed at the extraordinary general meeting on 31 July, with Romanov using his majority shareholding to push through his own motion.
Tellingly, the increase in Romanov's shareholding makes no difference to his level of control at Tynecastle, which is absolute already. Power is not his motivation this time.
David Murray took a similar approach to debt management in 2005 when he underwrote a shares issue to reduce Rangers' debt by £50 million.
The figures announced by Hearts yesterday represent a straightforward equation. UBIG – Ukio Banko Invest Grupe – guarantee the club's current debt, which was last recorded at £36 million. UBIG will now be issued with 34,285,714 ordinary shares, and these shares have a nominal value of 35 pence each. This gives the allocation a book value of £12 million, which brings the club's debt down by one third to £24 million.
The reduction in debt will save Hearts £600,000 per year in interest charges. But more significantly, the new level of debt puts the company on firmer footing, which is essential if external finance is to be raised to fund the estimated £50 million cost of ground redevelopment at Tynecastle.
In April this year, it was reported that the club's liabilities exceeded its assets by £25 million. In their assessment of Hearts as a going concern, auditors Johnston Carmichael reported: "These conditions ... indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern."
The company's sustainability will now improve, but it is by no means out of the woods yet.
Overall, the move should reinforce Romanov's commitment to Hearts. The conspiracy theory that he will walk away and close the club is not consistent with writing off £12 million in exchange for what would be a worthless shareholding. Likewise, for those who fear Romanov is an asset stripper, the level of debt would still wipe out the proceeds of a ground sale.
Chris Robinson, who was chief executive of Hearts before Romanov's takeover in 2005, tried to sell Tynecastle Stadium to property developers to cover the club's debt, which then stood at £18 million. The unpopular proposal led to Robinson's demise.
The full article contains 945 words and appears in The Scotsman newspaper.
