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By David Bond, Chief Sports Reporter
Last Updated: 1:58am GMT 21/12/2007
Liverpool's owners, Tom Hicks and George Gillett Jr, have just over a month to refinance the loans they used to buy the club in a £220 million deal last February.
Although it was previously thought that the £270 million funding package arranged with the Royal Bank of Scotland was due to be repaid two years after they bought the club, The Daily Telegraph can confirm that the loan expires in February 2008, with an option to extend for a further 12 months.
That means the American businessmen are facing a race against time to finalise a new £350 million financial package with RBS and American investment bank Wachovia to pay off their original loans, inject £60 million into the new stadium project at Stanley Park and cover £25 million of credit notes used to buy players.
As revealed by yesterday's Telegraph, a plan to raise a further £300 million to complete the relocation from Anfield to a new 70,000-seater ground has been shelved until 2009 at the earliest. But of far greater concern to Hicks and Gillett is the need to reach an agreement with their bankers for the first phase of the refinancing.
Although RBS could take control of the club if the Americans defaulted on the loan in February, the extension option could give them some extra breathing space. But Hicks and Gillett are keen to conclude a new deal before the existing agreement expires.
City sources added that it was extremely unlikely that RBS would pull the plug on Liverpool, knowing the controversial move would be a public-relations disaster. And despite uncertainty surrounding the future funding of a new stadium, RBS know Liverpool remain a well-run business with an annual turnover in 2006 of £121 million. Qualifying for the group stages of the Champions League has also removed one added financial pressure.
Talks between RBS, Wachovia and the Americans' bankers, Inner Circle Sports, were continuing last night but while both sides remain hopeful of doing a deal, hopes are fading of clinching an agreement before the Christmas break.
Although a spokesman for Hicks and Gillett insisted yesterday that they were working towards announcing a deal in the next 24 hours, one banking source here said confirmation was unlikely to come before Christmas.
The hold-up is understood to have been caused by concerns over Gillett's ability to put up more than £87 million in cash and guarantees to underwrite the new bank financing.
Hicks and Gillett are being asked to pump in £20 million in cash each, along with £75 million in letters of credit and £60 million in personal guarantees. One solution could be for Hicks, the wealthier of the club's chairmen, to help cover Gillett's share of the guarantees.
Source:
http://www.telegraph.co.uk/sport/main.jhtml?view=DETAILS&grid=
A1YourView&xml=/sport/2007/12/21/sfnliv121.xml |
