Liverpool Face Up To The Threat Of Administration As Crisis Deepens At Anfield

The sense of looming crisis threatening to engulf Liverpool deepened on Saturday as Roy Hodgson’s side stuttered to a 2-2 draw with Sunderland at Anfield and it emerged the Royal Bank of Scotland has not ruled out the possibility of Kop Holdings, the company which owns Liverpool, going into administration.

RBS holds the majority of the £282 million debt laden on to Liverpool by the club‘s current owners Tom Hicks and George Gillett and is due to call the loans in on October 15.

The bank, which is 84% government owned, introduced Martin Broughton as the club’s chairman and appointed Barclays Capital, the investment arm of the high street bank, to identify replacements for the Americans as owners in April.

That search has proved fruitless and, though managing director Christian Purslow suggested this week “a small number” of groups were conducting due diligence on the club’s accounts, it is believed no live bids are currently on the table.

Meanwhile, Hicks has explored a number of avenues that would allow him to refinance that debt but is yet to secure the necessary funding. He informed the club’s board last week that he was negotiating a deal with GSO Capital, an arm of the hedge fund Blackstone, but sources at the company have since insisted they are not intending to take the matter further.

That leaves RBS facing a choice as the deadline approaches between calling the loans in or offering Hicks and Gillett a short-term refinancing in order to continue the search for a buyer.

Should the bank opt for the former, it would put Kop Holdings at risk of going into administration, though Liverpool as a club is solvent. Though that would not automatically result in a nine-point penalty, as suffered by Portsmouth last season, Liverpool is the company’s only asset and, as such, the Premier League would be likely to examine the matter.

Such a prospect, even if it entailed a penalty which would all but end Liverpool’s season, though, is not as unappealing to the club‘s supporters as may have been assumed.

A poll conducted by Vizu for the supporters’ website anfieldroad.com revealed that 97.6 per cent of Liverpool’s fans believe administration is a better option for the future of the club than seeing Hicks and Gillett allowed to remain in control beyond October.

“We had the same two choices on the poll as the RBS decision makers will have next month,” said Jim Boardman of anfieldroad.com.

“Fans have chosen the uncertainty of a bank takeover and the real threat of administration over the depressing certainty of what would come from more time with Hicks and Gillett at the helm. The message to RBS in particular is clear: Do not refinance that debt.”

Thousands of supporters remained behind at Anfield after watching Steven Gerrard rescue a point for Hodgson’s side to voice their discontent at the Americans’ regime.

Further direct action has been planned by the supporters’ union Spirit of Shankly, including a march before next Sunday’s visit of Blackpool, to increase pressure on the owners and RBS.