Hicks and Gillett 'relaxed' about debt

Liverpool's American owners Tom Hicks and George Gillett may face some difficult decisions regarding their continued involvement at Anfield but the future of the club is not under threat.

The pair have just over six weeks to agree a refinancing package on the loan they took out to buy the Barclays Premier League side in 2007.

Accountants KPMG expressed concern over the level of debt being incurred by Kop Football Holdings, Liverpool's parent company, after it posted losses of £42.6million in the year ending July 2008.

Most of that was a result of £36million of interest payments on a loan of £350million - which has to be renegotiated by July 24.

However, suggestions Liverpool are facing financial meltdown have been dismissed by sources close to the American duo as "totally wide of the mark".

The club itself posted profits of £10.2million but that was swallowed up by the huge interest payments of the parent company.

"The owners seem remarkably relaxed about it, which can only be a good sign," an insider told PA Sport.

"There is no threat to the club. Liverpool's profitability and profits are up.

"There are other clubs who are considerably more in debt than Liverpool are."

Hicks and Gillett are confident they can refinance the loan in time for the July deadline.

However, leading football financial experts believe in the long term they need a huge influx of cash from outside or they will have to sell up.

In January Kuwaiti billionaire Nasser Al-Kharafi offered £425million for overall control but the Americans only want to sell 50% - which will prove a significant hurdle to further investment.

"It is quite difficult but not impossible to get debt refinanced but it is absolutely not the ideal time to be negotiating debt positions," said Vinay Bedi, divisional director of investment management firm Brewin Dolphin based in Newcastle.

"They wouldn't be short of banks to turn to but the bank would make it very much on their terms - all companies that have restructured their debt deals in the last few weeks have got very onerous restrictions."

However, Bedi does not believe the club is close to going under.

"It does create an element of financial risk to the business because it is not a good position but the credibility of English football would be badly tarnished," he added.

"For one of the top four clubs to be in this position is not particularly ideal but I wouldn't have thought the bank would want to call in the debt.

"I don't think anyone genuinely believes Liverpool will not be playing in the Premier League and Champions League next season - it is just a question of who is running it and how it is structured."

Bedi said that if Hicks and Gillett did decide to sell there would be a number of interested parties - at the right price.

"From an overseas point of view there are probably people to buy it as there is a better economic attraction because of the exchange rate," he said.

"The Premier League is still the best market for marketing yourself across the world and the fact Liverpool are one of the key clubs in the Champions League makes it an added attraction."

Another leading analyst, Professor Tom Cannon, believes Hicks and Gillett may have to sell their interest in their American sport franchises or even cash in on some of Liverpool's most saleable assets.

Midfielder Xabi Alonso is a reported £23million target for Real Madrid while Argentina captain Javier Mascherano is reportedly interesting Champions League winners Barcelona.

"It is almost hard to imagine they can resist the pressure on them to bring in another investor," Cannon, professor of strategic development at Liverpool University's school of management, told Sky Sports News.

"But whether another investor will come in on the type of conditions Hicks and Gillett seem to be asking is open to question.

"I think it is more likely Hicks will sell some of his interest in the Texas Rangers (baseball team) or [Gillett will sell] the Montreal Canadiens (ice hockey team).

"Unless they either sell Alonso or do more buying and selling then they will be operating in very difficult conditions.

"They desperately need new finances, not least to take the burden of this debt and the related interest.

"They can't really seriously think in terms of another six-month extension, they need long-term secure financing."

Paul Rice, chairman of the leading fans group Spirit of Shankly, called on the Royal Bank of Scotland - with whom the Americans have their loan - to call in the debt.

"The revelations underline Hicks and Gillett's utter failure as owners," he told the Liverpool Echo.

"We urge Royal Bank of Scotland to not refinance the loan and instead seek more responsible and appropriate custodians for Liverpool Football Club.

"All an extension would do is deepen the club's problems."

Arts & Entertainment
Madonna in her music video for 'Like A Virgin'
music... and other misheard song lyrics
Extras
indybestFake it with 10 best self-tanners
Sport
Peter Moores was criticised for failing to handle top players when he last led the England team
sportFive years after being sacked from the job, Peter Moores to be named a cricket coach
News
Much of the colleges’ land is off-limits to locals in Cambridge, with tight security
educationAnd has the Cambridge I knew turned its back on me?
VIDEO
Have you tried new the Independent Digital Edition iPad app?
Sport
Steven Gerrard had to be talked into adopting a deeper role by his manager, Brendan Rodgers
sportThe city’s fight for justice after Hillsborough is embodied in Steven Gerrard, who's poised to lead his club to a remarkable triumph
News
The energy drink MosKa was banned for containing a heavy dose of the popular erectile dysfunction Levitra
news
Environment
People are buying increasing numbers of plants such as lavender to aid the insects
environmentGardeners rally round the endangered bumblebee
News
Ida Beate Loken has been living at the foot of a mountain since May
newsNorwegian gives up home comforts for a cave
Extras
indybest10 best gardening gloves
Sport
Australia's Dylan Tombides competes for the ball with Adal Matar of Kuwait during the AFC U-22 Championship Group C match in January
sportDylan Tombides was diagnosed with testicular cancer in 2011
Arts & Entertainment
tvIt might all be getting a bit much, but this is still the some of the finest TV ever made, says Grace Dent
News
Posted at the end of March, this tweeted photo was a week off the end of their Broadway shows
people
News
peopleStar to remain in hospital for up to 27 days to get over allergic reaction
Arts & Entertainment
The Honesty Policy is a group of anonymous Muslims who believe that the community needs a space to express itself without shame or judgement
music
Caption competition
Caption competition
Have you tried new the Independent Digital Edition iPad app?
Daily Quiz
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

Day In a Page

How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
Ben Stokes: 'Punching lockers isn't way forward'

Ben Stokes: 'Punching lockers isn't way forward'

The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
Mark Johnston: First £1 million jackpot spurs him on

Mark Johnston: First £1 million jackpot spurs him on

The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit