Liverpool debt dispute forces Americans to consider sale

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The Independent Football

A dispute between Liverpool's American owners and the club's board over whether to laden the club with massive debts has cast fresh doubt over Tom Hicks and George Gillett's future at Anfield as new rumours circulated yesterday that they have agreed a deal to sell up.

One source, a major football financier, claimed last night that Hicks and Gillett had agreed a deal in principle to sell the club, which they co-own, for £350m, and that a process of due diligence was under way.

The potential buyers most consistently linked with Liverpool in recent months are Dubai International Capital, an investment vehicle ultimately controlled by Sheikh Mohammed bin Rashid al-Maktoum, one of the world's richest men. DIC came close to buying Liverpool a year ago and are certainly still circling, although the source suggested that a different investor – or partnership – might be behind the £350m bid. A DIC spokeswoman said: "We can only say 'no comment' at this stage."

Insiders at Liverpool denied a deal had been concluded with DIC, or that any due diligence was underway. Equally, both Hicks and the club maintain in private that Hicks, at least, is an unwilling seller, to anyone, at the moment.

However, a senior source at Liverpool told The Independent that "it is difficult to say categorically what is going on" and it is understood there is a growing schism between the board – which is trying to run the club on a day-to-day basis – and the owners.

The source of this rift is money, specifically a divergence of opinion about how Hicks and Gillett will restructure their finances. When they bought Liverpool last year, they paid for the club entirely with borrowed money, in the form of a £270m loan from the Royal Bank of Scotland. Of that, £174.1m was spent on equity, £44.8m on pre-existing debt, and the balance on working capital. The RBS loan is due to be repaid next month.

The Americans' representatives insist they are close to securing a new £350m loan, most of which will clear their first loan, with the rest spent on initial outlay on the proposed new stadium. The businessmen want to put the new debt directly on to Liverpool's books, guaranteed, crucially, against club assets, not their own.

Contrary to reports, the so-called "global credit crunch" has not been a significant factor in delaying a new loan. Rather, according to a well-placed source, "the very significant block" to the Americans' borrowing plans has been the board's opposition to heaping that debt on the club.

When Hicks and Gillett took over, they made much of the fact, referring to events at Manchester United two years beforehand, that theirs would not be a "Glazer-style" takeover, with the club potentially imperilled by debt set against its assets. Now, it seems, that is exactly what they were planning. Neither has spent any of their own cash yet. Unless they guarantee the new loans with their own money – which they may be unwilling or unable to provide – the impasse will continue.

In that sense, a buyer offering them £350m for their 100 per cent stake could well be attractive. It would allow them to repay their £270m RBS loan and walk away with an £80m profit between them after just a year's involvement. Yet as recently as last autumn, they were valuing the club at an extraordinary £1bn, a figure unrelated to financial reality.

Hicks and Gillett's relationship with the board is rapidly becoming as fractious as that with their manager, Rafa Benitez, upon whom they heaped huge embarrassment on Monday when Hicks revealed he had interviewed Jürgen Klinsmann in November as a stand-by candidate for Benitez's job.

"You might be able to make a case that they let Rafa know this had happened," said one exasperated Liverpool source. "But what on earth Hicks thought he would achieve by telling the world is beyond anyone."

Until the Americans have either resolved their financing problems or sold the club, plans for the new stadium, like Benitez's future, will remain up in the air.

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