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AWD and SJP caught up in Octopus EIS/Rangers saga

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AWD Chase de Vere and St James’s Place both say they have a small number of clients invested in the Octopus protected enterprise investment scheme caught up in the Glasgow Rangers’ administration.

Octopus protected EIS invests in Ticketus, a London firm which has provided Rangers with “working capital” in exchange for future season ticket sales.

Last week, Glasgow Rangers’ administrators Duff & Phelps said it was unclear on the whereabouts of £24m advanced from Ticketus to the Rangers’ account.

However, the administrators released a further statement this week suggesting that £18m of the money has been accounted for and was used to pay off Rangers’ debt to Lloyds Banking Group when the club was taken over by current owner Craig Whyte last May. “The application of the remainder of these proceeds is subject to further examination,” says the administrator.

It adds: “We are investigating all the circumstances surrounding both the purchase of the majority shareholding in Rangers Football Club and the flow of funds which stemmed from the transaction and were intended to fulfil the purchasers’ obligations at the time of the sale.”

In a statement in the press, Whyte says: “The Ticketus deal was by far the best way to protect the club, given the circumstances in that they have no security over any assets. The only person at risk from the deal is me personally because I gave Ticketus personal and corporate guarantees underwriting their investment; the club and the fans are fully protected. In terms of exposure, I am personally on the line for £27.5m in guarantees and cash.”

Last week, Octopus issued a statement saying Ticketus is just one of a number of companies the Octopus EIS invests in. It added that Ticketus is the owner of the tickets and Octopus is continuing to work with administrators and Rangers on the matter.

An AWD spokesman says the firm sold the EIS as a higher-risk offering, through different tranches of the same EIS, to a small number of clients.

A St James’s Place spokesman says the company sold the product to fewer than 50 clients, including partners, and has an exposure of less than £1m. SJP says it is continuing to monitor the situation closely.

Chelsea Financial Services head of investments Matthew Woodbridge says: “It is disappointing and potentially damaging to an asset class when it is related to such a story. We await more communication from Octopus.”

Octopus declined to comment on the issue.

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Readers' comments (4)

  • £1m/ 50 = £20k

    Minimum investment in Octopus EIS = £25k.

    Not sure that the SJP figures add up! Could their exposure be a touch more than £1m?

    Just wondering.....

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  • @1.53pm: The EIS has almost certainly fallen heavily in value in nominal terms since SJP's clients invested. That £20k each could easily have been £30k or more to start with. (That is not as bad as it sounds due to the generous tax reliefs you get with EIS investment.)

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  • Hi Just Wondering

    The Octopus EIS was a spread not single company EIS. Min investment was £25K but in shares of up to 10 ticketus companies. Each company invests in more than one event diluting the risk.

    The SJP figures do appear to add up.

    Do not worry

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  • LOL!

    Sooo funnnee

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