Liverpool are two months from becoming majority-owned by the taxpayer, which, the Observer can reveal, has become the likeliest outcome if a sale has not neared completion in that time.
The Royal Bank of Scotland's main £237m loan to the club expires on 6 October and must either be repaid or rolled over. Additional sums owing to RBS are believed to have increased the club's total debt to the bank to £325m. Liverpool's company secretary, Ian Silvester, said: "From what I understand, and that's all I can say, the urgency is there due to the pressure from the banks, so I would anticipate that something will be happening within the next four to six weeks or so."
One option open to RBS would be to put the club's parent company, Kop Football (Holdings), into administration, but that is not favoured since it would almost inevitably lead to a nine-point deduction under Premier League insolvency rules. Instead, the Observer has learned, unless one of the parties involved in negotiations to take over at Anfield follows through with a formal offer, RBS's corporate-restructuring team would assume control of Liverpool and run the club as a wholly owned subsidiary. That would effectively put the five-times European champions in the hands of the taxpayer who, through the government-owned UK Financial Investments Ltd, holds 84.42% of the issued share capital in RBS.
When the loans last required refinancing in April Martin Broughton was installed by RBS as club chairman. This is said to have been due to the inability of the current shareholders, Tom Hicks and George Gillett, to provide the necessary personal guarantees to the bank. But those close to the situation say RBS's patience has now reached breaking point. In the absence of a takeover or fresh funding from the Americans the bank will be entitled to oust Hicks and Gillett from the board of Kop Football (Holdings), a step the bank is believed to be ready to take in October.
"One or two in the bank are getting twitchy about getting their money back at all," a source said. "And they are incredibly nervous about the current bids. They don't regard anything as particularly serious at the moment."
Those said to be keen on bidding include the Chinese Kenny Huang, the Syrian Yahya Kirdi, the Kuwaiti Kharafi Group, the US private-equity firm Rhône Group and, reportedly, now the Indian conglomerate Sahara.
RBS's prerequisite in the sale process is for repayment in full, though none of the bidders has yet provided proof of funds. This is highly significant since formal due diligence cannot therefore proceed, despite pledges from several consortiums to build a new stadium and invest in the team.
That is when buyers would look for the first time over player contracts, planning applications surrounding the stadium and a host of other legal issues that could potentially throw up obstacles to a takeover. Due diligence can take weeks, so the chance of a takeover before the closure of the transfer window on 31 August is remote. There is also a growing possibility that the 6 October deadline will not be met.
In an effort to bring greater order to the chaos around Anfield, Broughton has issued a request for all parties to demonstrate their funding by the end of the coming week. There were indications yesterday from Huang's camp that he will show he is capable of financing a bid. However, for the first time there was an admission that any cash he has raised will not derive from China's sovereign‑wealth fund, the China Investment Corporation. That development raises issues over the credibility of Huang's bid, since those inside the sale process had previously been informed by his camp that CIC was involved.
Broughton will seek this week to apply similar pressure to Kirdi, whose consortium's credibility has been called into question by those involved in the sale process. If neither Huang nor Kirdi can meet Broughton's terms by next weekend, Liverpool will have no further contact with them.
That would leave only two, possibly three, bidders at the table. And without one of Rhône, Kharafi or Sahara proceeding over the next nine weeks to a stage where a takeover is almost a foregone conclusion, the prospect that Liverpool becomes effectively a state‑owned enterprise rises.