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Liverpool's American owners have concluded a deal
to refinance the bank loan they took out to buy the club in 2007.
Co-owners Tom Hicks and George Gillett are not expected to issue a
statement, but the deal is believed to be for another year and will
involve them paying back £60m of the original
debt.
Negotiations between the Royal Bank of Scotland, Wachovia and
the owners have continued for months the worldwide credit crunch
has made them tortuous.
There has been real fear that the banks would call in the loan,
while both Hicks and Gillett have searched for someone to take a
minority stake in the club for around £100m to no avail.
But a source close to the owners has confirmed that the deal has
now been concluded, and before last weekend's deadline for
refinancing the package expired.
The owners have reduced the £290m they owed to £230m, with £60m
being repaid, half immediately. Hicks, 63, and Gillett, 70,
purchased Liverpool in 2007 for £174m, taking on £44.8m of
liabilities.
At the time they maintained that financing the debt would not
fall on the club. But that attitude changed, and Liverpool now have
to find around £40m a year to service the debt, a situation that
has enraged fans' groups and impacted on boss Rafael Benitez's
transfer budget.
The owners have also failed to find the money to build the
club's new stadium with preliminary work on the Stanley Park
venture halting during last season. Extra cash for the stadium "did
not form part of any discussions" claimed the source, although
there is still a projected date for completion of 2012.
In the run-up to the new deal being concluded, Gillett has sold
his 80% stake in the Montreal Canadians ice hockey club for US
dollars 580million (£350million), while Hicks is trying to off-load
the Texas Rangers baseball team.
It is Hicks who has seemingly experienced most difficulty in
coming up with financial backing of late, and he recently defaulted
on interest payments on a US dollars 515m (£312million) loan in the
States recently.
Prior to the current credit crunch, loans of the size Hicks and
Gillett took for Liverpool would be expected to re-financed over
three or five years. But City sources doubt this new deal would be
for more than a year in the current climate.
Hicks and Gillett had a one-year arrangement when they first
bought the club, and then negotiated another year with a six-month
option.
They were granted that option, which expired at the weekend. But
critics, particularly fans' groups, will see this new agreement as
just papering over the cracks of a regime that has not been able to
take the club forward in the face of tough financial competition
from Chelsea, Manchester United, the Spanish giants of Real Madrid
and Barcelona, and now Manchester City.
Rogan Taylor, spokesman for the ShareLiverpool group who
re-launched their own takeover plans last week for, in effect, a
fans' co-operative, said: "The deal we are hearing about for the
re-financing of the Americans' loans is really what we
expected.
"These are the indications we have had from RBS for a while, I
would be interested to know really what Wachovia's view is. It has
been rumoured that they were very unsure about this new deal.
"It is little more than an expensive fix - just sticking plaster
and making things more difficult for the club to progress in the
long run. "It is still very short term, year to year, if that. The
owners are not able to take the club forward."
He added: "We produced our own plans again last week, and that
is based over a much longer period and aimed at the banks. "There
can be political pressure here. We, the tax payers, own RBS and
maybe they will eventually see that they can get most of their
money back with our scheme and it is a much longer-termed
plan."
