Hearts’ debt could be reduced by £12m if a ‘debt for equity’ plan is ratified at an extraordinary general meeting on July 31. The proposal, announced by Vladmir Romanov, the club’s majority shareholder, would see UBIG, the Lithuanian bank of which Romanov is also a majority shareholder, purchase over 34 million new ordinary shares at 35p each, effectively increasing their stake in the Tynecastle club from around 82 per cent to approximately 95 per cent.
Hearts’ debt could be reduced by £12m if a ‘debt for equity’ plan is ratified at an extraordinary general meeting on July 31. The proposal, announced by Vladmir Romanov, the club’s majority shareholder, would see UBIG, the Lithuanian bank of which Romanov is also a majority shareholder, purchase over 34 million new ordinary shares at 35p each, effectively increasing their stake in the Tynecastle club from around 82 per cent to approximately 95 per cent. Hearts’ debt, revealed as £36m in this year’s financial accounts, would be cut by 30 per cent (after taking account of transfer income) which, in turn, would reduce interest payments by £600,000 a year from £1.8m to £1.2m. Alex Gowan, chairman of the Heart of Midlothian Shareholders’ Association, said, ‘I think this is excellent news and has really reinforced Romanov’s long-term stance on the development of Hearts. When he first took a stake in the club the debt was around £17m or £18m and he decided at that stage to finance the development of the club through debt rather than equity. But the £36m debt in the last financial figures was clearly too high and unsustainable, and he has now decided that to finance the club through short-term debt is not the way forward. It is quite clearly the correct thing to do.’