Kieran Maguire: Rangers fear wrath of shareholders as cash injection now on the cards
Rangers have sought the approval of existing shareholders before issuing new shares because not to do so would likely incur their wrath.
That is the view of finance guru Kieran Maguire, speaking exclusively to Football Insider about the latest news from behind the scenes at Ibrox.
Rangers held their AGM on Tuesday (6 December), with all resolutions including the re-election of chairman Douglas Park passed by shareholder vote.
As relayed by Ibrox News that same day, one such resolution was a request to issue more shares on a preemptive basis.
Maguire explained why the club have chosen to consult their co-owners before this move, which will lead to a cash injection when the share issue is taken up.
"Most companies have to get approval for changes as far as new share issues are concerned," he told Football Insider's Adam Williams.
"The reason for this is that if a company does issue shares then it reduces the fractional share that existing shareholders have.
"If you own 20 per cent of a club and it then issues shares to other people, your investment could go from 20 per cent to 15 per cent.
"Therefore, if it is going to do that on a non-preemptive basis, which means that you don't give existing shareholders the opportunity to increase the number of shares they own to maintain their proportional share, this has to be approved.
"The last thing they want to do is disadvantage the existing shareholders who have historically put money into the club."