Estrella Football Group has definitively withdrawn its proposal to invest in Greenock Morton. The group issued a lengthy statement this week confirming there are no ongoing negotiations with the club or supporter group Morton Club Together (MCT).
The group spent several months developing its proposal before pulling out. Its concerns about the club's financial position first arose when it was unexpectedly approached during due diligence with a request for a loan. "Our concerns about the club's financial position first arose when Estrella was unexpectedly approached during the due diligence process with a request for a loan," Estrella Football Group said.
Financial concerns detailed
During its review, the group discovered the extent of outstanding sponsorship arrears had not been fully disclosed. It also found the club’s budget for the current financial year was "significantly too optimistic". Estrella Football Group feared its investment, proposed as growth capital, would instead be absorbed by existing liabilities and short-term financial pressures. The group stated what began as an investment in a financially healthy club had become a materially different investment with significantly greater financial and sporting risk.
Control and recruitment issues
The group also rejected suggestions its proposal would have given it control of Morton. Discussions had taken place about increasing its stake, but Estrella chose to retain a minority shareholding while reducing the proposed investment. The MCT Board had described the proposal in communications to its members as giving Estrella a 'controlling minority' interest. "What surprised us even more was that, despite our decision to retain a minority shareholding, the MCT Board subsequently described the proposal in communications to MCT members as giving Estrella a 'controlling minority' interest," the group's statement added, calling that description factually incorrect.
On the sporting side, Estrella identified a former football executive to help with recruitment and squad assessment, but he was denied access to the club's stadium. The group's assessment found Morton needed several additional players to strengthen the squad and reduce the risk of relegation. Delays in completing the deal meant the group lost the chance to influence recruitment before the current campaign.
The news comes as Morton sit near the bottom of the Scottish Championship with few points from their games, having lost heavily in their last outing. The club has scored few goals and conceded many this season. Estrella Football Group stated it retained respect for Morton and its supporters and wished the club success, but repeated that the proposal had been withdrawn with no ongoing negotiations.
