Tuesday 24 October 2017

Reds step up search for buyer

Former British Airways chairman to oversee sale as Barclays take on Anfield debt

Ian Herbert

LIVERPOOL’S owners Tom Hicks and George Gillett have taken a significant step towards their exit from Anfield after three turbulent years by persuading Barclays Capital to take over their debt and lead the search for a new owner.

Hicks and Gillett are expected to appoint the British Airways chairman Martin Broughton next week as an interim non-executive chairman to oversee the sale process. The willingness of Barclays is surprising, given Hicks and Gillett’s failure for more than two years to find a buyer and the frustrations experienced by current managing director Christian Purslow in his quest to raise £100m in new equity to pay down some of the £237m debt currently owed to Royal Bank of Scotland (RBS).

But the introduction of a new lending institution has been under discussion for some time. The New Yorkbased Rhone Group are understood to have been aware, as the days were ticking down to the deadline they had set on their £110m offer set for a 40pc share of the club, that moves were afoot to have the debt shifted to a new lending institution, which would seek a total sale of the club. Broughton’s appointment to lead that effort has not yet been confirmed but the former head of British Horseracing Board appears to believe that he can succeed where Bank of America, Merrill Lynch and Rothschild have failed in their pursuit of new investors since they were engaged last September.

The terms under which Barclays have taken over the £237m remain unclear but their arrival appears to remove the risk of immediate meltdown at Anfield, in which RBS wanted £100m of their advance back and Hicks and Gillett’s loans were due to be rescheduled by June 31. Though RBS had ordered Hicks and Gillett to undertake an “equity rise” to generate cash to pay back, their hands were tied because they were not in a position to foreclose on the Anfield owners. The controversy which would have been created by a publicly-owned bank was a deeply unwelcoming prospect for the bank, which simply did not consider it had the know-how to take over a football club.

It is thought that Barclays will lay off some of the debt, incurred by Hicks and Gillett in their leveraged buy-out in February 2007. Liverpool said yesterday that the position of Purslow, who was appointed by RBS to lead the search for new investment, will not be affected by the arrival of 62-year-old Broughton, the former chairman of British American Tobacco and the Confederation of British Industry, who was chairman of the British Horseracing Board for three years from 2004 until 2007.

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