22 September 2010

The future ownership of Premier League club Liverpool remains in doubt after the failure of American shareholder Tom Hocks to raise his stake in the club

. Private equity firm Blackstone decided not to back his refinancing plans to secure £280m worth of funding to postpone a move by the Royal Bank of Scotland, who are expecting an outstanding debt of £237m to be repaid early next month, to take control of its security. He had engaged in talks with GSO Capital Partners, the debt restructuring arm of Blackstone and had informed the rest of Liverpool‟s board of his plans last week. Hicks had hoped that he would be able to obtain from Blackstone sufficient capital to take full control of the club. However, it is understood that after a conversation had taken place between Hicks and Blackstone, they decided not to go ahead with a deal. It has been reported that Blackstone had opted to take that course of action after being bombarded by emails from furious Liverpool supporters following revelations of Hicks‟ plan. Hicks met Liverpool chairman Martin Broughton in London for talks last Wednesday to outline his plan to refinance to give him a minimum of two more years to find a buyer. The refinancing deal, which Hicks hoped he could conclude in advance of the Royal Bank of Scotland deadline of October 6, did not include funds to buy new players or to build a new stadium. This move would have conflicted with the Liverpool board's plea to their star players to stay at Anfield and await the arrival of new owners who will invest in the team and a £400 million new stadium. A banking source close to the inside track on events told ESPNsoccernet: "If Hicks gets his way, it would be a catastrophe for Liverpool. Besides more debt, higher interest payments and no stadium, it won't be a question of selling players but whether the players will want to go. The players were told by the board in the summer that there would be new owners and a new stadium, and that they would not be sold. If the top players can see what is happening, and if it happens, they will want to go, rather than the club wanting to sell them." The source added: "Up to last week when Hicks turned up with his plan, the worst-case scenario was that Liverpool would end up in mid-table without Champions League football again, but in no danger of going down, and would struggle along until the Americans went, sooner or later, and new owners would come along and rescue the club." The fans, though, are now fear the worst for Liverpool. ''The Spirit of Shankly Supporters' Union have received information regarding Barclays Capital and the state of Liverpool Football Club's finances over the Summer of 2010,'' an e-mail from the group read. ''While the original copy document is not in the Union's possession, a full and accurate copy of it has been made. 'The document throws up many questions about the public messages coming from Martin Broughton, the Club and Barclays Capital underlining again that Liverpool Football Club teeters on the edge of a financial abyss.'' The group have highlighted some main points, which show the full extent of the financial situation at Liverpool, including the fact that, in the period July to August, the club's debt was increased by £20.8m. Also, they have revealed that the sum currently required to refinance the club (£300m) can be reduced to £187.5m through using the proceeds of a £75m loan to the holding company in Delaware and by rolling £37.5m into the proposed loan for the new stadium. The Liverpool board‟s chairrman Martin Broughton, instructed lawyers Slaughter & May to review the club's legal position in the summer when they blocked Hicks' previous refinancing plans. The fear then, as now, is that Hicks would heap more debt repayments on the club and further cripple their already strained finances. The search for a new owner, which was meant to have gone into overdrive when Broughton was appointed as an independent chairman in April, also appears to have stalled. The main problem holding up a sale continues to be the value that Hicks and Gillett have put on the club. Hicks in particular is wanting to maximise any profit and had put a price tag of £600m for a sale despite being advised that they are unlikely to get anything above £400m.{jcomments on}

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