Liverpool FC WILL have to finance £30m interest a year on owners' loan

Jan 29 2008

Liverpool FC owners George Gillett (left) and Tom Hicks _320

LIVERPOOL Football Club will have to come up with around £30m a year to pay the interest on loans taken out by its American owners.

In an astonishing announcement that confirms the worst fears of many Reds fans, a spokesman for Tom Hicks admitted for the first time that the club will be responsible for servicing the £350m loan package.

The loan taken out with the Royal Bank of Scotland and Wachovia was divided in two. with £105m being loaded onto the club’s book, and the remaining £245m going on to

the books of Kop Holdings, the parent company set up by Hicks and George Gillett when they bought Liverpool last February.

But today’s bombshell news that it is the club, and not Hicks and Gillett, which will have to meet interest payments on both sections of the loan will put huge financial pressure on Liverpool to qualify for the lucrative Champions League every season.

A spokesman from Financial Dynamics, the City PR company representing Hicks, said: “The holding company debt is supported by the assets it acquired and should there ever be any shortfall in cash flow at the club or anywhere else in Kop in any given year, Kop’s ownership, under the terms of the financing package, is prepared to fund whatever is required.

“The debt is being handled exactly as it is handled at the vast majority of professional sports teams.”

John Mackin, of fans group Reclaim The Kop, admitted he now feared for the future of the club if Hicks and Gillett remain as owners.

He said: “We are looking at a level of debt, or the interest payments at the very least, which could sink the club if we have a couple of bad seasons.

“I’m just hoping that this admission by Hicks is part of an exit strategy which would allow him to sell the club because of the outrage this announcement will cause.

“A meeting has been called for Liverpool fans at the Sandon pub on Thursday night, and I’ve got no doubt that these interest payments will be one of the main talking points.”

Anfield sources today indicated that Liverpool chief executive Rick Parry and life president David Moores would continue their opposition to the club having to make any interest payments on the acquisition debt.

But such opposition could ultimately lead to the pair being removed from the club’s board.