The news that Hicks and Gillett have taken loans to finance Liverpool’s takeover should not come as any surprise.
They are smart, aggressive businessmen and they have taken a long-term view on Liverpool as a valuable investment.
The ‘offer document’ circulated to shareholders states that the Americans have taken a 298m loan from Bank of Scotland on a 7.24% interest rate, which means that Liverpool will be required to pay around 21m in interest payments each year. This amount covers the takeover as well as extra funds to absorb Liverpool’s debt and provide for future expenses.
A further 200m may be taken to further finance the stadium at Stanley Park.
Should Liverpool fans be worried? Nope, this sort of deal is nothing new in football. Liverpool’s loan has been taken on Hicks’ and Gillett’s ‘personal guarantee’, as opposed to on future earnings (in Arsenal’s case) or club assets (in United’s case).
More on the Liverpool takeover:
- Mihir Bose on the real deal behind DIB’s failed takeover
- Chief Exec Parry makes 500k out of the deal
- David Conn on the organisational details behind the Liverpool takeover