Sunday, January 13, 2008

LiverpooL Facing Second Takeover

Tom Hicks and George Gillett could be forced to sell their ownership of Liverpool by the end of February to Arab investors or the bank which financed their takeover.

The two Americans have encountered substantial difficulties in refinancing the £350m debt they incurred when buying the club last summer and are now reportedly unwilling to inject cash of their own in order to pacify the Royal Bank of Scotland, the bank from which it secured the loan.

According to The Observer, Gillett and Hicks are attempting to transfer the debt on to Liverpool itself but 'city sources believe this is an extremely difficult task to complete before the loan's due date at the end of February.'

'It is possible that the Americans will meet the deadline, but if not an Arab investment group, Dubai International Capital, is understood to be close to lodging an offer to buy out the American pair, probably for about £500m.n Takeover discussions are thought to be due before the end of this month,' the newspaper reports.

Gillett and Hicks have already ordered plans for a proposed new stadium to be downscaled and bickered with manager Rafa Benitez over the need to invest in new players.

With the size of their loan from RBS swelling to around the £350m mark, The Observer claims that 'attempts to restructure it have so far failed and the Americans have yet to inject new equity into the refinancing.

'While RBS have asked Hicks and Gillett to each commit £20m of their own cash to the deal, City sources believe that at least one of the pair is not prepared to do so.

'Should they fail in their efforts to repay the £350m acquisition debt on Liverpool when it comes due in just over six weeks, there would be the possibility of the next owner of the club becoming RBS.'

RBS are not thought to be keen on that scenario and the greater likelihood is that DIC will take over the club they were on the verge of acquiring last year before chief executive Rick Parry switched his allegiances and supported the American bid. Should, as speculated, the group buy Liverpool for around £500m then both Gillett and Hicks would profit from their venture by approximately £75m.

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