Tom Hicks and George Gillett set to refinance Liverpool
loan
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• £350m loan to be refinanced after 24 July deadline
• Hicks reported to be ‘very relaxed’ and ‘confident’
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Liverpool’s beleaguered co-owners, Tom Hicks and George
Gillett, look set to refinance their £350m loan with the Royal
Bank of Scotland and Wachovia from next month’s deadline, the
Guardian has learned. The extension could cost up to £3.5m for the
arrangement fee, with interest payments – approximately 4% above
the banking rate – similar to the terms on their current
facility.
It was announced last week that Hicks’ and Gillett’s parent
company, Kop Football (Holdings) Limited, suffered a £42.6m loss
for the year ending July 2008 despite a record turnover of £164.2m.
A Liverpool supporters group, Spirit of Shankly, has launched a
protest campaign to dissuade RBS from
extending the loan beyond the 24 July deadline.
However, the two banks are willing to extend their loan, given
rising income at a club who finished second in the Premier League
last season, qualifying for the lucrative Champions League for a
seventh season in a row. “Banks won’t want to jeopardise growth
through taking control,” a source close to the situation said.
Facing multi-billion pound losses, banks are pushing
unprofitable companies into insolvency or demanding control
through a debt-for-equity swap. In Spain the local savings bank
Bancaja has practically taken control of Valencia, who have about
£500m of debt. However, the source added: “It doesn’t make sense to
take control of a business that’s performing well; this approach
could be applicable to Liverpool.”
The refinancing deal will buy Hicks and Gillett time as they
attempt to avoid having to sell Liverpool, although their prospects
of borrowing a further £400m to build a new stadium on Stanley Park
have receded. Last week’s accounts included a warning from the
accountants, KPMG, that there would be
“significant doubt on the group’s and parent company’s ability to
continue as a going concern” without an extension to the £350m
loan. A source close to Hicks responded that the Texan was “very
relaxed” and “confident”.
Liverpool’s manager, Rafael Benítez, meanwhile, has confirmed
that he has funds to enhance his squad this summer. “I won’t talk
about any figures and I can’t say how much we have,” he said.
“Clearly we don’t have too much to spend but I think we have enough
money to add the one or two players that we need.”