Liverpool FC finance restructuring plan hits a snag, claim City sources

Jan 22 2008

CONTROVERSIAL plans by the owners of Liverpool FC to restructure their debt have hit a problem.

City sources said today that the proposed £350m deal with the Royal Bank of Scotland could collapse, and DIC is waiting in the wings to make a move for the club should that happen.

Tom Hicks says the deal is on course, but speculation is growing about George Gillett's ability to secure the loan.

The source said: "There is no doubt that Hicks is ready to put up the money that the RBS has asked for. But the situation may not be the same with Gillett."

The situation is also clouded by the ongoing crisis in the US and Canadian stock markets.

Financial experts now believe a recession is almost inevitable.

With Hicks and Gillett having secured the initial loan to buy Liverpool against assets in American and Canada, their financial position is not as strong today as it was just 24 hours ago.

The source added: "This crash could not have come at a worse time for Hicks and Gillett, there is no question about that.

"Every bank and lending agency will be tightening its belt and RBS maybe more than most because they suffered big losses in yesterday's downturn.

"That means anyone seeking a major loan will have to prove to them that they have the necessary assets to secure it against and Gillett could have a hard time proving this is the case – and that's if he wants to prove it."

Tom Hicks recently promised to have financial restructuring – which would heap around £350m of debt onto the club – completed by the end of last week.

With that deadline now having passed, he is facing a race against time to get it done because the initial one-year loan the duo took out with the RBS to buy the club a year ago expires in a fortnight.

DIC is watching events unfold with great interest and, should refinancing not take place, is ready to bid for the club at the earliest possible opportunity.

Meanwhile, fans’ movement Reclaim The Kop is to ask supporters to boycott RBS and its products should the bank push ahead with the loan to Hicks and Gillett.