The Royal Bank of Scotland – who are Liverpool owners Tom Hicks and George Gillett‘s current lenders – have put an October 6th deadline in place, by which time they expect the American pair to fully repay outstanding loans that totaled somewhere around the £285 million mark at the last count.
The deadline means that Hicks and Gillett will either be forced into finally selling their ‘soccer franchise’ off to the highest bidder, or somehow pluck a means of settling their debts with the bank out of the ether.
At the moment, no party has been willing to come close to matching their inflated asking price (alleged to be somewhere between £600-£800 million, for a club that was purchased for a reported £219 million just three short years ago) as the mark-up doesn’t justify the ‘product’.
So, due to their reluctance to sell Liverpool for a cut price, Hicks and Gillett will now have to refinance their debt once again in order to ensure that they hold on to their business until they are able to flog it at a price that resembles their valuation.
The pair are becoming increasingly desperate to sell their stakes in Liverpool amidst a wave of ill-feeling but, being the rootin’ tootin’ businessmen they are, they want to move the club on for a considerable profit – and therein lies a sure-fire, one-way route to ‘sh*t or bust’.
By somehow persuading the RBS to extend their loans once more, Hicks and Gillett would be able to maintain their current position at Liverpool, however, back in June of this year a similar move was blocked by the current Liverpool board (lead by chairman Martin Broughton and managing director Christian Purslow), who vetoed the American owners’ attempt at refinancing their monolithic debt.
Hicks and Gillett planned to use both the club’s assets and some of their assets in the US to underwrite new loans – a move that would have seen the continuation of the current, blatantly unsustainable, financial structure in place at Anfield.
That said, it doesn’t seem that ‘option 2’ will be the likely course of action come October, considering that the RBS have made a move to signal that it won’t be a viable option this time round.
The bank have moved Hicks and Gillett’s debts into it’s ‘toxic-assets’ division, which means that the assets they originally used to underwrite their debts are now worth so little that they no longer sufficiently support the amount of money owed. In short, they now have no real option but to sell the club on for whatever price they can manage to muster.
The RBS are understandably looking for an orderly sale, but given the American’s well-documented propensity to recoup as much as possible for their respective stakes in Liverpool, it’s uncertain whether they will ‘go quietly’ or whether the bank may have to flex it’s legal muscles.
Forced insolvency and administration are the usual measures applied in those circumstances, but the RBS would be reluctant to put such procedures in place as it would mean lengthy, unsavoury dealings with all the interested parties as well as the Premier League themselves, who would have to dock Liverpool nine points under their own rules.
The bank would then effectively seize control of Liverpool. With no vested interest in keeping hold of the club, it would seek to sell it for a knock-down price to ensure it was sold as quickly as possible – probably using the outstanding debt as a rough guideline for a minimum sale price.
So, if you are insane to the point that you think the little wombats in your head control the moon, and you would like to buy a football club that is currently on it’s knees because of a Yankee debt-infestation – I know where you can get one on the cheap!