Liverpool Owners Review Finance Options
Liverpool’s US owners Tom Hicks and George Gillett are weighing up a potential sale of the club amid problems surrounding a much-needed restructuring of the duo’s loans.
Hicks and Gillett need to restructure the £350m loan from Royal Bank of Scotland they took out to buy the club by 25th January when the current terms expire. The bank, recently bailed out by the UK government, is however barred from restructuring any loan deals as a result of the current economic circumstances.
This leaves the US duo with two options – either look for a potential investor to sell their stake in the club to or use the team’s profits in order to service the loan interest acquired in buying the club.
The search for an investor has been unsuccessful thus far after Sheikh Mohammed, the Crown Prince of Dubai and a long-standing interested buyer in Liverpool, rejected the price of more than £550m set by the American owners.
The club is believed to have appointed investment bank Merrill Lynch to seek out new investors to takeover Liverpool from Hicks and Gillett.
The club’s large revenue in 2007 suggests that the debt is however sustainable and Hicks and Gillett confirmed they plan to use over half of the Liverpool’s anticipated profits of £40?m for the last financial year to pay parts of the interest on the loan.
These profits could increase as Liverpool has also announced four new commercial partnerships which total in value to more than £10m.
The partners come from four different industries – travel, online betting, video gaming and motor racing. The deals include UK sports tour operator Thomas Cook, gaming firm Konami, bookmakers Paddy Power, and a Liverpool-branded racing car that will appear at the Superleague Formula Motor Racing Championship.
