by Reg » Thu Aug 12, 2010 11:58 pm
Tom Hicks and George Gillett face £20m bank penalty if Liverpool is not sold
Liverpool owners Tom Hicks and George Gillett will have to pay the Royal Bank of Scotland £20 million in penalty fees if the club remains unsold at the end of August, it has emerged.
11:00PM BST 12 Aug 2010
Though Kenny Huang, the leading contender to oust the Americans, yesterday insisted talks are progressing smoothly, he admits he is only "50 per cent" confident of securing a £400 million takeover.
The bank, which holds £237 million of debt placed on the Anfield side by its American owners, has imposed the so-called "ticking fees" against Hicks and Gillett, rather than Liverpool, in an attempt to force a sale of the club.
Hicks and Gillett are also thought to be personally liable for millions of pounds in punitive interest charges since RBS agreed to a new refinancing deal in April. The bank will take the fees out of the proceeds of a sale of the club, though should Liverpool fetch less than the £282.4 million sum of its total debt, RBS will pursue the Americans for the extra funds.
Liverpool's current owners are holding out for a £600 million deal to cover liabilities elsewhere in their business empires, but sources familiar with the sale have suggested that such a price remains a pipe-dream.
Yahya Kirdi, the Syrian-Canadian businessman acknowledged as the Americans' preferred bidder, has denied he will meet that valuation, while Huang is thought to be preparing an offer of around £400 million.
The Chinese entrepreneur yesterday broke his silence on his prospective takeover in an interview published by Love Basketball magazine in his homeland, insisting an outline proposal has been approved by Liverpool's chairman, Martin Broughton, and the club's board.
He also moved to assuage a number of doubts over his offer, including the provenance of funds and the identities of his backers, though he stopped short of confirming whether he had tabled a formal bid to buy the club.
"We have signed a confidentiality clause with regards to the acquisition of Liverpool," Huang was quoted as saying. "I am 50 per cent confident we will acquire the club. We have provided a large number of documents. Liverpool's board has approved our proposal and we will have an answer in less than 10 days.
"Liverpool's board have given us a positive response, but there are still plenty of unknowns. Our competitors are very strong and the board has not confirmed they will accept us. There are rivals from North America and the Middle East. We still have some distance to go, but we were informed the board regard our proposal as acceptable in the macro."
Huang also dismissed suggestions he would walk away should a deal not be completed by the end of the week and confirmed that Yang Guang, his partner in Liverpool's would-be parent company QSL, is involved in the bid in an advisory capacity.
Though Liverpool fans will be unconcerned by personal debts accrued by their unpopular owners, the club's future, should Hicks and Gillett manage to retain control at Anfield, will be a cause of considerable distress.
"Liverpool's is not a long-term business model," said Philip Long of PKF accountants, who conduct an annual survey into football finance. "There simply is not a happy ending to leveraged buy-outs. The burden of the interest outweighs any profits the club make, and that becomes unmanageable.
"The two Americans hanging on and seeing their debt refinanced by RBS, continuing to pay interest, is a far worse scenario than the bank taking over the running of the club. The debt burden will just increase to a point where the interest is not being serviced any more. The ultimate end game, if Hicks and Gillett cling on, is that Liverpool goes bust."
Meanwhile, Huang could come face to face with one of the American owners he is trying to oust from Anfield at a London conference later this year, writes Paul Kelso.
Huang has not spoken to the UK media since making public his bid for the club, but regardless of what transpires with Liverpool, he has already agreed to give a presentation at the Economist Global Sport Summit at the end of October.
Juang is listed under his Chinese name, Jian-Hua Huang, among the speakers on the conference website. A spokesman for the conference said he had confirmed his attendance weeks before his interest in Liverpool became public.
In a twist that could add a little tension to events, George Gillett is among the delegates who have indicated they will attend the conference, which will be held at the Grosvenor House Hotel on Oct 29, two days before the annual NFL match at Wembley.
Whether the ownership of Liverpool will have transferred between Huang and Gillett is a moot point, and it remains to be seen whether both men fulfil their commitment to the event. Two years ago both Gillett and Tom Hicks attended the conference.
Daily Telegraph
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