Reds: Liverpool owners Tom Hicks and George
Gillett Jr
Liverpool's American owners, Tom Hicks and George Gillett
Jr, have postponed until 2009 plans to borrow £300 million from
banks to pay for the club's new home at Stanley Park, plunging the
project into fresh uncertainty. Hicks and Gillett are confident of
clinching a separate interim deal before Christmas with the Royal
Bank of Scotland and American bank Wachovia to borrow £350 million
to refinance a loan used to fund their £220 million takeover last
February and pay for initial building work.
Hicks and Gillett are confident of clinching a separate interim
deal before Christmas with the Royal Bank of Scotland and American
bank Wachovia to borrow £350 million to refinance a loan used to
fund their £220 million takeover last February and pay for initial
building work.
However, The Daily Telegraph has learned that there are now serious
question marks over the rest of the money required to complete the
move from Anfield. A combination of the global credit crunch and
nervousness over the level of debt which will be placed on to
Liverpool's balance sheet has forced Hicks and Gillett to abandon
plans to raise all the money in one go.
Instead they are now looking to borrow £350 million to pay off a
two-year loan with RBS worth approaching £270 million, inject £60
million of working capital for the new ground and cover £25 million
of credit notes used to finance the summer purchases of Fernando
Torres and Ryan Babel, again provided by RBS.
It is understood that while the £60 million of stadium financing
will get Hicks and Gillett through the first 18 months of work on
the Stanley Park project there are serious concerns over how they
will raise the remaining £300 million needed to complete the
stadium, which has been scaled back after the designs came in £50
million over budget.
Sources close to Hicks and Gillett maintain the Americans are
confident of raising the money for the stadium in 2009 when it will
be two years from completion and easier to secure contracts with
future sponsors for naming rights and to predict income from the
sale of club seats and executive boxes. But contrary to promises
made at the time of their takeover earlier this year, the owners
are now preparing to load at least half of the new £350 million
debt on to the club.
Banking sources said that, while Hicks and Gillett had now agreed
to pump in £20 million each of their own cash to secure the new
£350 million loan, one of the main sticking points previously has
been the American pair's reluctance or inability to put up their
own money. In addition to the £40 million in cash, the pair are
also underwriting £75 million in letters of credit and £60 million
in personal guarantees. The refinancing of the club's debts means
that from next season Liverpool will have to shoulder about £30
million in annual interest repayments.
According to financial predictions for 2008, that will swallow up
much of the club's spare cash, making it harder to provide funds
for manager Rafa Benitez to invest in his squad. And although
Benitez called a truce with Hicks and Gillett following a meeting
on Sunday, tensions with the owners are likely to resurface if he
is forced to sell players to fund new acquisitions in
January.
