Tuesday 28 February 2017

Bank closes in on Liverpool

Matt Scott

Liverpool are two months from becoming majority-owned by the British taxpayer, which, it can be revealed, has become the likeliest outcome if the sale of the club has not neared completion in that time.

The Royal Bank of Scotland's main £237m (€285m) loan to the club expires on October 6 and must either be repaid or rolled over. Additional sums owing to RBS are believed to have increased total debt to the bank to £325m (€390m).

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 into administration, but that is not favoured since it would almost inevitably lead to a nine-point deduction under Premier League insolvency rules.

Instead, 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 British taxpayer who 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 Rhone 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.

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.

Sunday Independent

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