Business Directory

Browse the Directory

Sign Up to the Directory

FC Business Twitter
FC business Linked in
FC Business facebook
FC Business Youtube

RBS is losing patience with Gillett & Hicks

Wed 26th May 2010 | Clubs Ownership

Tom Hicks and George Gillett Jr are holding out for an offer of at least £600 million for Liverpool, but have yet to find a serious buyer more than a month after putting the club on the market.

The Times has learnt that while that is the price tag set by the American owners, Royal Bank of Scotland (RBS), the club’s lender, values Liverpool at closer to £400 million and may put pressure on the pair to lower their demands to secure a sale.

RBS declined to comment, but sources close to the bank said that frustration with the unpopular Americans is growing.

Liverpool’s £290 million loan from RBS and Wachovia, the American bank, formally expires in July, which ordinarily would have precipitated a debt crisis at the club. But Hicks and Gillett gained an informal agreement with lenders last month to get an extension on the loan in return for a promise that they would sell up.

The banks granted Liverpool a non-binding assurance that cash will continue to be available next season. The promise was essential because Martin Broughton, the club’s recently appointed chairman, had to appear before the Premier League to give a commitment that they would be able to fulfil their fixtures.

Accounts published by the club a fortnight ago disclosed the extent of Liverpool’s financial malaise. As of July 31 last year, the club’s total debts were £472.5 million — Kop Holdings, the company that owns Liverpool, is responsible for £351 million — and they are paying £40.1 million interest on their bank loans.

KPMG, the club’s auditor, expressed a “material uncertainty” about Liverpool’s ability to continue as a going concern, the second year running it has made that assessment of the club’s finances.

RBS is expected to bankroll Liverpool long enough for the Americans to find a buyer. But while it is not in RBS’s commercial interest to make Hicks and Gillett forced sellers of the club, the bank’s patience is not infinite and it is likely to start to apply pressure on the Americans to cut the price if no credible bidder has appeared by the start of next season.

Broughton, who is facing down the unions over strike action in his role as chairman of British Airways, has said that he will stay on at Liverpool only until the club are sold. He has already told The Times that he expected a sale to go through “within a matter of months”.

The market valuation of Liverpool is about £350 million, lower even than what RBS believes the club is worth.

Add to: Google Google | Yahoo Yahoo | Live Live | del.icio.us del.icio | Digg Digg |

Related Articles

Portsmouth Enter Possible Takeover Talks

Thu 23rd Mar 2017 | Clubs Ownership

Portsmouth Football Club has confirmed it’s in talks regarding a potential takeover. In a statement released by the club, they said: “Portsmouth Community Football Club would like to...

Walker Morris Advise On Leeds United Sale

Thu 5th Jan 2017 | Clubs Ownership

Specialist Sports Law Team at Walker Morris reinforces its national reputation for football club acquisitions/sales with the latest sale of Leeds United FC. Specialist sports lawyers at Walker Morris...

Aser Group Holding Acquires 50% Of Leeds United

Wed 4th Jan 2017 | Clubs Ownership

Aser Group Holding has completed its investment in Leeds United Football Club today. Leeds United Football Club has confirmed Aser Group Holding, through its acquisition vehicle Greenfield Investment...

Notts County Sold To Local Businessman

Mon 19th Dec 2016 | Clubs Ownership

Notts County owner Ray Trew has confirmed the sale of the club after reaching an agreement with local businessman Alan Hardy. Having held discussions with a number of prospective buyers in recent...