Liverpool's beleaguered co-owners, Tom Hicks and George Gillett, look set to refinance their £350m loan with the Royal Bank of Scotland and Wachovia from next month's deadline, the Guardian has learned. The extension could cost up to £3.5m for the arrangement fee, with interest payments – approximately 4% above the banking rate – similar to the terms on their current facility.
It was announced last week that Hicks' and Gillett's parent company, Kop Football (Holdings) Limited, suffered a £42.6m loss for the year ending July 2008 despite a record turnover of £164.2m. A Liverpool supporters group, Spirit of Shankly, has launched a protest campaign to dissuade RBS from extending the loan beyond the 24 July deadline.
However, the two banks are willing to extend their loan, given rising income at a club who finished second in the Premier League last season, qualifying for the lucrative Champions League for a seventh season in a row. "Banks won't want to jeopardise growth through taking control," a source close to the situation said.
Facing multi-billion pound losses, banks are pushing unprofitable companies into insolvency or demanding control through a debt-for-equity swap. In Spain the local savings bank Bancaja has practically taken control of Valencia, who have about £500m of debt. However, the source added: "It doesn't make sense to take control of a business that's performing well; this approach could be applicable to Liverpool."
The refinancing deal will buy Hicks and Gillett time as they attempt to avoid having to sell Liverpool, although their prospects of borrowing a further £400m to build a new stadium on Stanley Park have receded. Last week's accounts included a warning from the accountants, KPMG, that there would be "significant doubt on the group's and parent company's ability to continue as a going concern" without an extension to the £350m loan. A source close to Hicks responded that the Texan was "very relaxed" and "confident".
It was announced last week that Hicks' and Gillett's parent company, Kop Football (Holdings) Limited, suffered a £42.6m loss for the year ending July 2008 despite a record turnover of £164.2m. A Liverpool supporters group, Spirit of Shankly, has launched a protest campaign to dissuade RBS from extending the loan beyond the 24 July deadline.
However, the two banks are willing to extend their loan, given rising income at a club who finished second in the Premier League last season, qualifying for the lucrative Champions League for a seventh season in a row. "Banks won't want to jeopardise growth through taking control," a source close to the situation said.
Facing multi-billion pound losses, banks are pushing unprofitable companies into insolvency or demanding control through a debt-for-equity swap. In Spain the local savings bank Bancaja has practically taken control of Valencia, who have about £500m of debt. However, the source added: "It doesn't make sense to take control of a business that's performing well; this approach could be applicable to Liverpool."
The refinancing deal will buy Hicks and Gillett time as they attempt to avoid having to sell Liverpool, although their prospects of borrowing a further £400m to build a new stadium on Stanley Park have receded. Last week's accounts included a warning from the accountants, KPMG, that there would be "significant doubt on the group's and parent company's ability to continue as a going concern" without an extension to the £350m loan. A source close to Hicks responded that the Texan was "very relaxed" and "confident".
No comments:
Post a Comment