Liverpool FC Forum

[JBG]

I'm not that worried for the long term. The fact is that Liverpool FC is such a strong brand name and has such awesome potential that no matter how much Hicks and Gillette might f.uck things up, someone else will always be willing to take the club off their hands.

There is no comparison with say, Leeds, who are a far smaller club.

I'd be more worried about the short or middle term, such as Hicks and Gillette imposing a transfer embargo or fire sale of assets.

I'm not so sure mate, how long did it take us to get Hicks and Gillett when we had a debt of circa £40million? If they put the club in huge debt (circa £300/700million)who's going to jump in and take that onboard?

Everyone saw what happened at Leeds, the players couldn't get away fast enough. How long do you think our top players would hang around if it looked like we were going under?

I am not saying that its likely to happen, but don't dismiss it as being impossible.

The mortgage to finance the purchase belongs to Hicks and Gillette: if they sell the club they don't get the full sale money, they'd only get what's left after repaying the mortgage.

Its like buying a house: if someone sells you a house with a 300,000 mortgage doesn't mean you get the house with the debt. The 300,000 would be cleared off from your purchase monies.

[account deleted by request]

I'm not that worried for the long term. The fact is that Liverpool FC is such a strong brand name and has such awesome potential that no matter how much Hicks and Gillette might f.uck things up, someone else will always be willing to take the club off their hands.

There is no comparison with say, Leeds, who are a far smaller club.

I'd be more worried about the short or middle term, such as Hicks and Gillette imposing a transfer embargo or fire sale of assets.

I'm not so sure mate, how long did it take us to get Hicks and Gillett when we had a debt of circa £40million? If they put the club in huge debt (circa £300/700million)who's going to jump in and take that onboard?

Everyone saw what happened at Leeds, the players couldn't get away fast enough. How long do you think our top players would hang around if it looked like we were going under?

I am not saying that its likely to happen, but don't dismiss it as being impossible.

The mortgage to finance the purchase belongs to Hicks and Gillette: if they sell the club they don't get the full sale money, they'd only get what's left after repaying the mortgage.

Its like buying a house: if someone sells you a house with a 300,000 mortgage doesn't mean you get the house with the debt. The 300,000 would be cleared off from your purchase monies.

That is the whole crux of the re-financing problem JBG, they are intending to put the debt onto the club not themselves, and as the debt will EXCEED the value of the club, even if it was then sold the debt would have to remain on the club.

IE as in the example you gave, if a house was valued at £300k but the debt on the house was £350k , the house would be repossessed and sold, the bank would then go after the debtor for the balance. In this case the balance of the debt would be on LFC not H&G.

As when Liverpool was sold to H&G it was sold with debt of around £20/40million.

H&G bought the club for £185million, but borrowed £113million extra as working capital in total £298million. As the club was only valued at £174million that means that if the debt becomes LFC'S we will be in considerable trouble if H&G walk away. This is one of the main reasons that they are having problems refinancing the loan, and why the banks are asking for personal guarantees from H&G. h&g are also trying to get £25million of transfer market debt added to the load.

Liverpool by numbers David Bond - Telegraph
£174m Amount paid by Tom Hicks and George Gillett for Liverpool
£298m Amount borrowed by Hicks and Gillett at the time of their takeover
£500m Amount now being sought to pay for new stadium and to refinance original loan
£30m Expected operating profit for 2006/2007
£21.5m Annual interest payments on the existing loan
£23.5m Net spending on players this summer
£20.2m Most expensive signing - Fernando Torres from Atletico Madrid
£250m Cost of new stadium at Stanley Park

If the club went into receivership, we would be fined and docked 15 points to add to our woes.

[JBG]

I'm not that worried for the long term. The fact is that Liverpool FC is such a strong brand name and has such awesome potential that no matter how much Hicks and Gillette might f.uck things up, someone else will always be willing to take the club off their hands.

There is no comparison with say, Leeds, who are a far smaller club.

I'd be more worried about the short or middle term, such as Hicks and Gillette imposing a transfer embargo or fire sale of assets.

I'm not so sure mate, how long did it take us to get Hicks and Gillett when we had a debt of circa £40million? If they put the club in huge debt (circa £300/700million)who's going to jump in and take that onboard?

Everyone saw what happened at Leeds, the players couldn't get away fast enough. How long do you think our top players would hang around if it looked like we were going under?

I am not saying that its likely to happen, but don't dismiss it as being impossible.

The mortgage to finance the purchase belongs to Hicks and Gillette: if they sell the club they don't get the full sale money, they'd only get what's left after repaying the mortgage.

Its like buying a house: if someone sells you a house with a 300,000 mortgage doesn't mean you get the house with the debt. The 300,000 would be cleared off from your purchase monies.

That is the whole crux of the re-financing problem JBG, they are intending to put the debt onto the club not themselves, and as the debt will EXCEED the value of the club, even if it was then sold the debt would have to remain on the club.

IE as in the example you gave, if a house was valued at £300k but the debt on the house was £350k , the house would be repossessed and sold, the bank would then go after the debtor for the balance. In this case the balance of the debt would be on LFC not H&G.

As when Liverpool was sold to H&G it was sold with debt of around £20/40million.

H&G bought the club for £185million, but borrowed £113million extra as working capital in total £298million. As the club was only valued at £174million that means that if the debt becomes LFC'S we will be in considerable trouble if H&G walk away. This is one of the main reasons that they are having problems refinancing the loan, and why the banks are asking for personal guarantees from H&G. h&g are also trying to get £25million of transfer market debt added to the load.

Liverpool by numbers David Bond - Telegraph
£174m Amount paid by Tom Hicks and George Gillett for Liverpool
£298m Amount borrowed by Hicks and Gillett at the time of their takeover
£500m Amount now being sought to pay for new stadium and to refinance original loan
£30m Expected operating profit for 2006/2007
£21.5m Annual interest payments on the existing loan
£23.5m Net spending on players this summer
£20.2m Most expensive signing - Fernando Torres from Atletico Madrid
£250m Cost of new stadium at Stanley Park

If the club went into receivership, we would be fined and docked 15 points to add to our woes.

I still don't see what the great problem is Saint.

Hicks and Gillette would not be able to pass off the debt of purchasing the club to another party (i.e the club) and pocket the entire sale proceeds to a 3rd party. They would almost certainly have had to give personal guarantees to Bank of Scotland for the purchase monies so even if the club were to default on the mortgage repayments Hicks and Gillette would have had to put their hands into their own pockets to make up the shortfall. There is no way they would have been able to obtain finance otherwise.

The current problem (as I see it) is that in the current global financial market Hicks and Gillette have struggled to refinance at lower interest rates which is what they have intended to do all along. The problem has been exasperated by spiralling costs of the stadium. As far as I can see Hicks and Gillette are struggling to raise additional finance for the increasing stadium costs because of the global credit crunch.

If they sell the club as matters currently stand (without work on the new stadium commencing) the loan with Bank of Scotland would have to be redeemed. This would come from the sale proceeds. Gillette and Hicks will not entertain any offers below the current redemption figure with Bank of Scotland otherwise they stand to make a loss. They'll seek to make a profit and it remains to be seen whether a new purchaser would be prepared   to fork out more than what the Americans paid. If somebody won't Hicks and Gillette will have to soldier on and either put the new stadium on the back burner for the time being or scale back the stadium plans and scale back operating costs which will hit Rafa's transfer budget which will naturally hinder our ability to compete for the Premiership.

However, realistically, this would amount to a short to medium term difficulty as the Stanley Park stadium has such outstanding potential in terms of revenue that if Hicks and Gillette don't hang about until its fruition, someone else will be quite willing to take a punt.

It is true that further investment on the stadium will have to be absorbed by a prospective purchaser but I see nothing unusual about that. I mean, we are taking about a potentially 70,000 all seater stadium here, it won't come for free and a prospective purchaser will have to take that on board. However, there is nothing unusual in that: big business often make massive capital expenditures in order to take the next step forward (even Intel, which dominates its market, spends billions on upgrading its manufacturing plants).

What this does mean that the club will always be out of reach of those Steve Morgans out there: owning a Premiership club is a billionaires game now.

I see no chance of us ever going into administration or a massive firesale of assets like what happened with Leeds. The club here is the security and the principal asset and there is little danger of the banks allowing it to be ripped apart as it is far too valuable an asset to do so.

I'm not saying that there won't be short or medium term problems like little money for Rafa to spend but fears of a Leeds like catastrophe are miles off the mark.

[JBG]

That is the whole crux of the re-financing problem JBG, they are intending to put the debt onto the club not themselves, and as the debt will EXCEED the value of the club, even if it was then sold the debt would have to remain on the club.

While I'm not an expert on UK law (ask Peewee for that  ) I'm pretty sure that's illegal under the Companies Act.

As a director You can't raise finance and then artificially pass it onto to a company and then sell the asset and pocket the proceeds. I have some experience with mortgages and a bank will simply not give a company a loan without either the security covering at least 100% of the loan and almost also a personal guarantee from one or more of the directors.

[account deleted by request]

I'm not that worried for the long term. The fact is that Liverpool FC is such a strong brand name and has such awesome potential that no matter how much Hicks and Gillette might f.uck things up, someone else will always be willing to take the club off their hands.

There is no comparison with say, Leeds, who are a far smaller club.

I'd be more worried about the short or middle term, such as Hicks and Gillette imposing a transfer embargo or fire sale of assets.

I'm not so sure mate, how long did it take us to get Hicks and Gillett when we had a debt of circa £40million? If they put the club in huge debt (circa £300/700million)who's going to jump in and take that onboard?

Everyone saw what happened at Leeds, the players couldn't get away fast enough. How long do you think our top players would hang around if it looked like we were going under?

I am not saying that its likely to happen, but don't dismiss it as being impossible.

The mortgage to finance the purchase belongs to Hicks and Gillette: if they sell the club they don't get the full sale money, they'd only get what's left after repaying the mortgage.

Its like buying a house: if someone sells you a house with a 300,000 mortgage doesn't mean you get the house with the debt. The 300,000 would be cleared off from your purchase monies.

That is the whole crux of the re-financing problem JBG, they are intending to put the debt onto the club not themselves, and as the debt will EXCEED the value of the club, even if it was then sold the debt would have to remain on the club.

IE as in the example you gave, if a house was valued at £300k but the debt on the house was £350k , the house would be repossessed and sold, the bank would then go after the debtor for the balance. In this case the balance of the debt would be on LFC not H&G.

As when Liverpool was sold to H&G it was sold with debt of around £20/40million.

H&G bought the club for £185million, but borrowed £113million extra as working capital in total £298million. As the club was only valued at £174million that means that if the debt becomes LFC'S we will be in considerable trouble if H&G walk away. This is one of the main reasons that they are having problems refinancing the loan, and why the banks are asking for personal guarantees from H&G. h&g are also trying to get £25million of transfer market debt added to the load.

Liverpool by numbers David Bond - Telegraph
£174m Amount paid by Tom Hicks and George Gillett for Liverpool
£298m Amount borrowed by Hicks and Gillett at the time of their takeover
£500m Amount now being sought to pay for new stadium and to refinance original loan
£30m Expected operating profit for 2006/2007
£21.5m Annual interest payments on the existing loan
£23.5m Net spending on players this summer
£20.2m Most expensive signing - Fernando Torres from Atletico Madrid
£250m Cost of new stadium at Stanley Park

If the club went into receivership, we would be fined and docked 15 points to add to our woes.

I still don't see what the great problem is Saint.

Hicks and Gillette would not be able to pass off the debt of purchasing the club to another party (i.e the club) and pocket the entire sale proceeds to a 3rd party. They would almost certainly have had to give personal guarantees to Bank of Scotland for the purchase monies so even if the club were to default on the mortgage repayments Hicks and Gillette would have had to put their hands into their own pockets to make up the shortfall. There is no way they would have been able to obtain finance otherwise.

The current problem (as I see it) is that in the current global financial market Hicks and Gillette have struggled to refinance at lower interest rates which is what they have intended to do all along. The problem has been exasperated by spiralling costs of the stadium. As far as I can see Hicks and Gillette are struggling to raise additional finance for the increasing stadium costs because of the global credit crunch.

If they sell the club as matters currently stand (without work on the new stadium commencing) the loan with Bank of Scotland would have to be redeemed. This would come from the sale proceeds. Gillette and Hicks will not entertain any offers below the current redemption figure with Bank of Scotland otherwise they stand to make a loss. They'll seek to make a profit and it remains to be seen whether a new purchaser would be prepared   to fork out more than what the Americans paid. If somebody won't Hicks and Gillette will have to soldier on and either put the new stadium on the back burner for the time being or scale back the stadium plans and scale back operating costs which will hit Rafa's transfer budget which will naturally hinder our ability to compete for the Premiership.

However, realistically, this would amount to a short to medium term difficulty as the Stanley Park stadium has such outstanding potential in terms of revenue that if Hicks and Gillette don't hang about until its fruition, someone else will be quite willing to take a punt.

It is true that further investment on the stadium will have to be absorbed by a prospective purchaser but I see nothing unusual about that. I mean, we are taking about a potentially 70,000 all seater stadium here, it won't come for free and a prospective purchaser will have to take that on board. However, there is nothing unusual in that: big business often make massive capital expenditures in order to take the next step forward (even Intel, which dominates its market, spends billions on upgrading its manufacturing plants).

What this does mean that the club will always be out of reach of those Steve Morgans out there: owning a Premiership club is a billionaires game now.

I see no chance of us ever going into administration or a massive firesale of assets like what happened with Leeds. The club here is the security and the principal asset and there is little danger of the banks allowing it to be ripped apart as it is far too valuable an asset to do so.

I'm not saying that there won't be short or medium term problems like little money for Rafa to spend but fears of a Leeds like catastrophe are miles off the mark.

Thats what they thought at Leeds before the crash mate 

The danger is not that H&G could walk away having pocketed the sale check for the club. The danger is that they can walk away from from the club with no debt on themselves(scot free), but leaving huge debt on the club. ie the buyer agrees to take on the debt and buys the club for a nominal fee £1

At the moment the loan is guaranteed against G&H assets and a loan guarantee bond. G&H are trying to put the loan on LFC through the two subsidiary companies they set up,Kop Football Ltd and  Kop Football (Holdings) Ltd. If they succeed, no debt will be accounted as their (G&H) debt ,and in the event that they wish to depart, no penalties would be on them, the whole of the outstanding debt would be on LFC.

The problem is two fold :-

1 THE CLUB GETS REPOSSESSED. We are then at the mercy of a bank that will obviously look to its own interests not LFC'S. If receivership is in the banks interest, thats where we would go.

2 THE CLUB IS SOLD. The buyer having to take on huge debt, will no doubt deter many of the better options , so we could be left in the clutches of the less attractive buyers who see in LFC a chance to asset strip, sell the players sell, the stadium etc etc as happened with Leeds. Leeds had a debt of LESS THAN £100MILLION when they went into meltdown. We could be faced with a debt IN EXCESS OF £500MILLION.

Leeds budgeted to reach the CL and failed, we are budgeting to reach the knockout rounds EVERY YEAR what happens if we fail?

We are a bigger club than Leeds, no doubt Leeds were saying at the time ,that they were a bigger club than Chelsea, who got sold for £1. Who no doubt were saying they were a bigger club than Wolves who were sold for £10 to Steve Morgan.

[account deleted by request]

That is the whole crux of the re-financing problem JBG, they are intending to put the debt onto the club not themselves, and as the debt will EXCEED the value of the club, even if it was then sold the debt would have to remain on the club.

While I'm not an expert on UK law (ask Peewee for that  ) I'm pretty sure that's illegal under the Companies Act.

As a director You can't raise finance and then artificially pass it onto to a company and then sell the asset and pocket the proceeds. I have some experience with mortgages and a bank will simply not give a company a loan without either the security covering at least 100% of the loan and almost also a personal guarantee from one or more of the directors.

They wouldn't be pocketing any proceeds, thats not the worry.

The value of a football club is a volatile commodity, its not just bricks and morter. They are having great difficulty refinancing the loan, one of the reasons is they are unwilling to put in any personal guarantees, but want the WHOLE OF THE DEBT PLACED AGAINST THE CLUB.

Leeds United sold to Bates
Wed 11 Jul, 04:53 PM


LONDON (Reuters) - Ken Bates won his battle to regain control of Leeds United on Wednesday when his group of investors bought the debt-ridden third division club from administrators.

The club was put up for sale last week after Revenue and Customs service had challenged a proposal by chairman Bates to take it out of administration with an offer to creditors of eight pence in the pound.

Administrators KPMG said the club, who are fallen giants of English football, had been sold to "Leeds United Football Club Limited, headed by Ken Bates, for an undisclosed sum."

Joint Administrator Richard Fleming added: "We received several offers for the business which we considered carefully.

"The approved deal represents the best result for creditors in the circumstances and we believe provides the club with the best chance of survival.

"We understand this has been a difficult time for all those concerned about the future of Leeds United.

"This deal is a necessary step if the club is to have a chance of playing in League One in the 2007/08 season."

The new owners need to apply to the Football League to obtain the Football Share, which entitles them to play in the third tier of the English game next season.

Leeds, who have debts of 35 million pounds, are due to start the new season at Tranmere Rovers on August 11.

Seven years ago Leeds reached the Champions League semi-finals and were relegated from the Premier League in 2004.

They have been English champions three times in 1969, 1974 and 1992, won the FA Cup in 1972 and three years later were beaten by Bayern Munich in the European Cup final.

Chelsea

During the late 1960s and early 70s, the club's owners embarked on a modernisation of Stamford Bridge with plans for a 50,000 all-seater stadium.[19] Work began on the East Stand in the early 1970s but the cost almost brought the club to its knees, and the freehold was sold to property developers. Following a long legal battle, it was not until the mid-1990s that Chelsea's future at the stadium was secured and renovation work resumed.[19] The north, west and southern parts of the ground were converted into all-seater stands and moved closer to the pitch, a process completed by 2001.

The Stamford Bridge pitch, the freehold, the turnstiles and Chelsea's naming rights are now owned by Chelsea Pitch Owners, a non-profit organisation in which fans are the shareholders. The CPO was created to ensure the stadium could never again be sold to developers. It also means that if someone tries to move the football club to a new stadium they could not use the Chelsea FC name.[22]

Don't think it can't happen just because we are Liverpool because it can.

[teamleader1]

Has that snake Parry made any statement on behalf of the yanks regarding the reports of them missing payment deadlines?
if not, we can take it for granted that they are looking for a way out after plundering whatever they can from the clubs coffers.
The snake never made one statement when Rafa was getting all the flak, but fell over himself to get a statement out to defend Hicks regarding reports of him selling up.
Lets hope the yanks fk off without causing to much damage to the club, but just as importantly, lets hope we see the back of the enemy within,Parry!
The more you find out about the behind the scenes dealings in this whole affair, the more it stinks to high heaven! 

[account deleted by request]

Goldman Sachs off Liverpool debt deal -sources
Wed Aug 29, 2007 7:02 PM BST140 - Reuters

By Elena Moya

LONDON, Aug 29 (Reuters) - U.S. investment bank Goldman Sachs is no longer working for Liverpool F.C. to refinance the debt used to buy the soccer club earlier this year, people familiar with the situation said on Wednesday.

Following the March acquisition by U.S. tycoons Tom Hicks and George Gillett, bankers at Goldman Sachs's New York office drew up a highly geared refinancing plan that would have put about 550 million pounds ($1.1 billion) of debt onto the club's books, more than 20 times its profit, one of the sources said.

Liverpool is now focusing on either extending or refinancing a 300 million pound bridge facility, which expires in February. A new adviser may be appointed, the source added.

"Goldman is no longer involved in refinancing Liverpool," a second source said.

Both sources spoke on condition of anonymity.

Goldman Sachs declined to comment, while Liverpool F.C. were not immediately reachable for comment.

Investors are shying away from highly leveraged deals following the recent turmoil in credit markets, making it more difficult for companies to access financing.

Liverpool arch-rival Manchester United [MNU.UL] also failed this summer to refinance its high-priced debt, following the acquisition of the club by U.S. billionaire Malcolm Glazer.

Unlike Glazer, the refinancing plan for the Liverpool takeover did not include a direct equity investment by the new owners but was instead slated to be funded only with new debt , the first source said.

The plan was to raise about 300 million pounds to re-pay the bridge facility provided by Royal Bank of Scotland, as well as another 250 million pounds to finance the building of a new stadium, the source added.

The stadium, originally expected to cost about 280 million pounds, may now end up costing as much as 400 million pounds, the source said.

The Goldman Sachs plan included raising as much as 8 million pounds for naming rights on a new stadium , the source said, while London rival Arsenal generates about 3 million for its Emirates Stadium.

A little out of date but I think the facts speak for themselves.

[NANNY RED]

Im actualy brickin it after reading some of the reports here these yanks have well and truley took us for mugs .

One of the articles goes on about Naming rites on the new stadium hell can you imagine having a different name instead of Anfield makes my blood boil just even thinkin about it.

Ill tell you what if this stadium ever and i mean ever get built i cant just see Liverpool football club playing footie there this stadium is gonna be used for more than just us.

These yanks are so clever watch, the know were unhappy about the Rafa situation and how theve treated him, they know we havnt given them are full support yet and are unhappy with the financial situation watch them try and be clever come Jan . Dont be suprised come Jan they give Rafa some money to buy in the transfer window just so well calm down and take our minds off whats going on behind closed doors with what dodgy there doin. Show the fans some new players and they wont be worrying about how much money were putting the club in dept by

Thats my conspiricy anyway

[account deleted by request]

To be honest Nanny if we can get £8million for naming rights I wouldn't really be too upset. It will be known as "New Anfield" by all the supporters for the first few years anyway, no matter what silly name they try to give it.

The irritating thing is we have G&H struggling to raise money, and the Sheikh Mohammed bin Rashid al-Maktoum (who owns DIC) HAS JUST GIVEN AWAY £5 BILLION TO CHARITY.

LINK TO BBC

[NANNY RED]

To be honest Nanny if we can get £8million for naming rights I wouldn't really be too upset. It will be known as "New Anfield" by all the supporters for the first few years anyway, no matter what silly name they try to give it.

The irritating thing is we have G&H struggling to raise money, and the Sheikh Mohammed bin Rashid al-Maktoum (who owns DIC) HAS JUST GIVEN AWAY £5 BILLION TO CHARITY.

LINK TO BBC

I hope that Parry has seen that  they say charity begins at home Saint oh it makes my blood boil to think what might have been

I was rantin today to some lads about the Yanks, West Ham supporters they were and i went on about how i was scared it could turn into a Leeds situation if they cant raise the finance i thought they would think i was a nutter whod just escaped but i couldnt have been more wrong, they agreed with me, And no they werent takin the mick they were dead serious
.
But as i said before Saint watch these two slimeballs try and pacify us with a couple of signings in Jan. Lying scumbags

[LegBarnes]

Say G&H was friends of the glazers right and they buy club borrow this money club goes bust then they sell it to DIC for a profit we lose 15 points lose out of CL place and even have to sell off most of our good players we are ruined as a club is it just me or does this all seem a bit fishy ?

dont worrie i dont prob think this is case but i am starting to think this whole G&H thing is well dodgy.

[Toffeehater]

To be honest Nanny if we can get £8million for naming rights I wouldn't really be too upset. It will be known as "New Anfield" by all the supporters for the first few years anyway, no matter what silly name they try to give it.

The irritating thing is we have G&H struggling to raise money, and the Sheikh Mohammed bin Rashid al-Maktoum (who owns DIC) HAS JUST GIVEN AWAY £5 BILLION TO CHARITY.

LINK TO BBC

saint , do we qualify? , lets go and queue up for the money

[LegBarnes]

To be honest Nanny if we can get £8million for naming rights I wouldn't really be too upset. It will be known as "New Anfield" by all the supporters for the first few years anyway, no matter what silly name they try to give it.

The irritating thing is we have G&H struggling to raise money, and the Sheikh Mohammed bin Rashid al-Maktoum (who owns DIC) HAS JUST GIVEN AWAY £5 BILLION TO CHARITY.

LINK TO BBC

TBH he is worth 100s of billions the guy makes roman look like a tramp.

Why dont we find the e-mail address of DIC and start to flood them with e-mails to beg them to buy out liverpool what ever the cost i know its a long shot but if they can see how much the fans want them to hold the assists of out great club mabye we might finaly get all this out of the way and finaly get back to pure footballing matters.

What you all think on this you think it might work ?

[jeff capes]

i know this may sound really cheesy and corny but i think we should give the last few coins to rafa to waste on another jerk kuyt....in rafa we trust.

we should sack rafa and make gerard the youngest player manager in history...lets face it he's responsible for any success we have had.

take him out and we are left with rafas team...useless clowns.