Wednesday, September 29, 2010

Liverpool FC Royal Bank of Scotland Debt Deadline Looms Large For American Owners

Liverpool FC’s American co-owners may have just 17 days left in control at Anfield.

The deadline for repaying their £237m debt, the majority of which is held by Royal Bank of Scotland (RBS), expires next month.

October 16 has long been the deadline day in many fans’ diaries for Tom Hicks and George Gillett to repay their debts. But the Daily Post understands that Friday, October 15, is the earliest date the Americans’ debt will be called in by chief creditor, RBS.

And even that provisional deadline is likely to slip a further seven days as the bank seeks to facilitate an orderly transition of power at the club.

It is understood that the bank would rather that the club is sold to a new owner by October 15.

But given the over-optimistic £600m- plus valuations that Hicks, in particular, has placed on the club, it remains likely that a sale will not be complete by that deadline.

Talks with two serious prospective bidders are thought to be at a relatively advanced stage, although formal offers are some way off. Chairman Martin Broughton, managing director Christian Purslow, and commercial director Ian Ayre are understood to be keen to not just accept the highest bid.

Instead the trio, who have a majority on the board, want to secure investment in the playing squad and a new stadium, as well as paying off the club’s debts.

Ultimately the bank could force the holding company which owns LFC into administration and seek to sell the club itself, but this is seen as a last resort.

The prospect of getting little or no profit from the sale of the club has led to Hicks carrying out a worldwide trawl in a bid to refinance the debt. It is feared the creation of an investment company, Hicks Acquisition II, is part of his plan to retain control.

Papers registered with the USA’s Securities and Exchange Commission, show Hicks Acquisition II is seeking to raise $230m (£145m).

Shares are being offered for $10 in the “newly organized blank cheque company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.”

The initial public offering papers also warn prospective investors that “investing in our securities involves a high degree of risk”.

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