Tom Hicks and George Gillett Jr, the Liverpool owners, have less than six months to secure the £100 million investment demanded by their creditors or they run the risk of being forced to put the club up for sale.
Christian Purslow, the Liverpool managing director, revealed the extent of the pressure that is being brought to bear on the club to reduce their £237 million debt by the Royal Bank of Scotland (RBS) — with whom they have a one-year refinancing agreement that expires at the end of July — in the minutes of a meeting he held with the Spirit Of Shankly supporters’ group.
RBS has made it a prerequisite of another refinancing deal being secured that Liverpool cut their debts by £100 million. Should they fail to do so, Hicks and Gillett would be faced with two options: find another financial institution willing to enter into an arrangement with them or put the club on the market. Purslow refused to guarantee that such investment would be secured in the specified time frame, although he did inform the supporters’ group that he hopes it can be done.
Hicks and Gillett are not expecting their creditors to prop up their ailing regime for a further year unless the requirements outlined by Purslow are met, and the admission by their managing director that there is no Plan B should talks with a number of potential investors come to nothing raised the possibility of the Americans being forced to sell in the summer.
“One of our key priorities is to reduce the debt by £100 million,” said Purslow, who described himself yesterday in an interview with AS, the Spanish sports newspaper, as “a specialist taking on companies with financial problems”. He said: “This is a requirement from our bankers and will allow us to look at a more flexible and longer-term refinancing when this investment is brought in. The targeted reduction was agreed by the bank, myself and the owners when I was brought in [as managing director in June 2009].
“The £100 million investment will be made by the issuance of new shares and will not go towards anything else other than paying down the debt, reducing it to £137 million. This new investment will also mean a dilution of the current ownership.
“There are no promises [that investment can be secured by July], just an expectation and hope that it can be done in that time. There are around five or six potential investors.
“You should rest assured any investor in this economic environment will spend plenty of time understanding Liverpool before committing. I would rather get it right than rush, and our banks and owners agree.”
Liverpool are edging closer towards agreeing a pre-contract deal to sign Milan Jovanovic, the Standard Liège and Serbia forward, who will be available on a free transfer in the summer.
Source: TimesOnline