A HEDGE fund based in Guernsey has bought two million shares in Rangers.

One of Rangers' biggest shareholders - businessman Richard Hughes - sold his stake in the company earlier this week.

The buyers have been revealed as Damille ­Investments II Limited, who now control a 3.07% share in the company.

It comes as Rangers' share price has been falling steadily, since the AGM of shareholders last month.

On Tuesday, 2.5m shares were sold at 24p - a new low since with a further 250,000 sold at 25p.

That is a fall from the 70p price at the launch of the share issue - just more than a year ago.

Three million shares worth around £750,000 were traded in Rangers International Football Club plc.

It was the largest single day trading volume in more than a month.

The news was confirmed in a statement to the London Stock ­Exchange yesterday.

A statement read: "Damille Investments II Limited holds 2,000,000 shares through Schweco Nominees Limited."

Mr Hughes, who controlled 3.4% of shares in Rangers through his Zeus Capital firm, is ­understood to have made a profit of more than £500,000 from the sale.

As the share price has been falling, Rangers chief executive Graham Wallace has been ­conducting a review of the business.

Significant cuts to the budget are expected to be implemented, to bring costs in line with income.

It is understood Rangers manager Ally McCoist has been told he will have to make cuts to his playing budget.

Wallace had told shareholders at the AGM savings would need to be made.

Earlier this week, ­McCoist signed off on a pay cut of around 50%, which he agreed to in October.

Meanwhile, consultant Philip Nash has been brought to Ibrox to help oversee the financial overhaul.

Laxey Partners Ltd, a hedge fund based in the Isle of Man, remain the biggest shareholder in Rangers, with a 12.7% stake.