Saturday 27 May 2017

Gillett and Hicks given three weeks to accept £100m deal

Ian Herbert

Liverpool's American owners are under more financial pressure to settle their debts than has previously been thought, with the New York-based company bidding to take control of the club imposing a three-week deadline to take or leave their offer.

The Rhone Group's proposed £100m investment for a 40pc share would enable the Liverpool chief executive, Christian Purslow, to deliver the entire sum to the Royal Bank of Scotland, the club's bankers, to pay down £100m of debt as the bank has demanded.

However, the time pressures the club currently faces are also compounded by the fact that Liverpool appear to have just 20 days to deliver some of that £100m figure to the bank.

The presumption had always been that the deadline is July, by which time the club's current debt facility expires and must be renegotiated.

Liverpool's predicament appears to leave Rhone Group's partners Steve Langman and Robert Agostinelli in a strong position to take over a controlling stake -- despite having offered a price which values the club at a half of the £500m Tom Hicks and George Gillett rejected from Dubai International Capital two years ago.

There are currently no other prospective buyers lined up for Liverpool.

Liverpool indicated last night that there was no precise deadline date for repaying the £100m and that there is some degree of leeway. The ultimate sanction would be RBS taking over, although that is highly unlikely as RBS is a state-owned bank.

Running a Premier League club is not high on the agenda of a bank which announced a £2.6bn operating loss for the last financial year. But the endgame for Hicks and Gillett is certainly far closer than has been appreciated.

Liverpool fans have witnessed too many false dawns to harbour illusions about the latest possible saviours to be linked to their football club, but they can perhaps be forgiven that there is some serious money around this time.

Partners

Rhone Group's senior partners include Robert Agostinelli, whose ex-wife Mathilde is a senior executive at Prada. He is an acquaintance of French president Nicolas Sarkozy and has spoken with deference about Italian premier Silvio Berlusconi. Both Agostinelli and Steve Langman, another partner at Rhone, have invested in the Republican presidential campaigns of John McCain and Rudy Giuliani.

But the new names issuing around the environs of L4 are actually in a different bracket to many of those that have been sounded before.

These two are no billionaires and certainly not in the same stratosphere as those -- from Dubai's Sheikh Mohammed bin Rashid Al Maktoum to Indians Mukesh Ambani and Subrata Roy -- who have been linked with the club before in these turbulent past few years.

The Rhone Group, with offices in New York, Paris and London, has an annual turnover of just £5.9m according to its most recent accounts.

The critical factor is that the firm is not in possession of the funds it invests. Like any fund management outfit, it invests cash for others -- be it pension funds or the savings of high net worth individuals.

It was the fund management arm of Rhone Group which tabled a proposal at midnight on Friday with Liverpool FC, a "distressed" business, as it sees it, and one which should yield a cash return in the medium term.

Some supporters at Liverpool may feel that they do not covet these individuals as new proprietors. Agostinelli is an individual who once described Berlusconi as "a leader who will save the country" and who also once suggested that "the left is a cancer that needs to be eradicated".

The spirit of Shankly this is most certainly not.

But if Rhone Group does turn out to be the majority shareholder at Liverpool, don't expect the imprimatur of the two partners to be all over the club.

Rhone's investors are looking at Liverpool as "just another business deal", according to one source familiar with the outfit.

Their other recent ventures have included financing for the clothes firm Quiksilver, putting money into the toy chain Early Learning Centre, and part-owning the aluminium company Almatis, which Rhone then sold, incidentally, to a former Liverpool suitor, Dubai International Capital.

With a portfolio as diverse as that, Rhone's partners are certainly not going to be willing to tolerate Tom Hicks and George Gillett commanding a controlling stake in the club.

One of the mysteries of their proposed investment -- the figure varies from £80m to £115m according to who you talk to -- is why they would be willing to put so much money in for a 40pc share, only to face the prospect of Hicks and Gillett banding together to form a 60pc controlling influence.

The details of any agreement signed off between Rhone and Liverpool would settle that. It is likely that Hicks and Gillett would have to agree to be sleeping partners, although it is understood that Agostinelli and Langman would not be seeking active involvement in the running of the club -- as the current American incumbents have.

Remoteness need not be a bad outcome. If Purslow can resolve the £100m issue, he can set about rescheduling his club's debts over three years on better terms, rather than the sequence of 12-month arrangements which seems to make every June an anxious time at Anfield, and there is confidence that if the club can be put on more secure financial footing in this way, then further capital can be secured to build the new Stanley Park stadium which has been the key to the club's financial future for so long.

The suggestions are that Rhone Group would buy into that idea.

Needless to say, Hicks and Gillett have not expressed any great delight about Rhone Group, though the plight the club are now in does not give them room for manoeuvre with RBS.

The future of the club is in the hands of Purslow, whom RBS see as the individual to deliver back some of the money they are owed. (© Independent News Service)

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