Liverpool owners close in on debt deal
Friday 25 January 2008
Liverpool were preparing for the unenviable challenge of winning back the confidence of their fans last night, as the club's American owners moved towards the completion of a £350m financing deal.
Though co-owners Tom Hicks and George Gillett are persona non grata among fans, those responsible for the day-to-day running of the club – who have had no way of preventing the refinancing going ahead – have persuaded the Americans that a large slice of the new debt they are taking on should be set against their own corporate structures rather then the club itself. This will leave the club on a firmer financial footing than it might have been, when the refinancing is completed – possibly today or next Monday
"We are acutely aware of the challenge of winning the fans' confidence," a Liverpool source said yesterday. "Nobody here is making light of that for a minute. It is now up to the owners whether they take on board those concerns."
There has been no acrimony between the club's Liverpool hierarchy and the owners over the loading of debt on to the Americans' new holding company, called Kop Investment, rather than on to the club.
"It was not what they envisaged, but they accepted the point [that the club should not take the entire debt]," said the source. But it took the intervention of chief executive Rick Parry, who in December faced the prospect of the Americans loading the entire £350m debt on to Anfield, to ensure the structure was forced through.
The loading of costs incurred in buying the club, plus the fees and interest which are understood to come to a staggering £50m alone, on to Hicks and Gillett mean that only £105m of debt, comprising £60m for the club's new stadium project and £45m for working capital to finance the purchase of players, will be Liverpool's. That is a perfectly acceptable arrangement, the club taking on costs relating to it own development rather than those generated by the Americans' leveraged buyout in February last year. The terms of the agreement are also expected to see Hicks and Gillett putting in around £40m, supported by personal guarantees and letters of credit. This debt would be paid off personally by Hicks and Gillett with the club paying the pair dividends each year.
But talking fans round will be difficult and the main issue for many is not complex refinancing but Hicks' candid – and ill advised – public admission earlier this month that he had approached Jurgen Klinsmann about the manager's position at Anfield. Many posts on the Liverpool Echo club forum yesterday urged a boycott of the club.
"Short-term pain for the long-term gain.." read one. "It may damage the performances in the short term unfortunately, but that's nothing compared to the damage that may be caused to the club in the long term if these cowboys are allowed to remain."
The refinancing deal will give the Americans renewed security at Anfield, free from the impending threat of their initial repayment period running out, and their new era at Anfield brought news yesterday of a likely £3.5m profit on Momo Sissoko, who signed for £5.5m from Valencia in 2005. Talks between Liverpool and Juventus over the player's proposed move to Italy are at an advanced stage.
"It's a matter of a few days," Sissoko told the Italian newspaper Gazzetta dello Sport. "A maximum of four days and then everything will be decided.
Latest in Sport
- 1 Woman 'suffocates newborn baby in plastic bag and puts it in her desk minutes after giving birth'
- 3 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 5 Chinese student carries disabled friend to school every day for three years
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
General Election 2015: Britain would become a 'communist dictatorship' under Ed Miliband and Nicola Sturgeon, claims wife of Michael Gove