• Fans' hate-figure part of bid to keep control of club
• No buyer imminent as owners seek profit on sale
* The Guardian, Saturday 18 September 2010
Tom Hicks and his son Tom Hicks and his son at Stamford Bridge to watch Liverpool in 2008. Photograph: Mike Egerton/Empics Sport/PA Photos
Tom Hicks's last-ditch attempt to retain control of Liverpool is likely to be opposed even more vehemently than previously thought, as the American's proposals are understood to include a plan to restore his son, Tom Hicks Jr, to the Anfield operation. Hicks Jr resigned in January as a director of Liverpool and its parent company, Kop Holdings, after an abusive exchange with a supporter, to whom he retorted in an email: "Blow me
face."The news that Hicks Sr, co-owner of Liverpool with George Gillett, was in London discussing raising loans to replace Liverpool's £237m bank debts and thereby keep control already alarmed supporters this week. Liverpool's three directors besides Hicks and Gillett – the chairman, Martin Broughton, the managing director, Christian Purslow, and the commercial director, Ian Ayre – are expected to oppose any refinancing of the club's debts presented by Hicks Sr, on more onerous terms than the interest Liverpool currently pay. The revelation that Hicks is planning to bring back his son will further inflame the anger harboured by many Liverpool fans against their club's American owners.
Hicks Sr, whose representative would not confirm any details, was said to be in talks this week with GSO, a division of the private equity firm Blackstone which, according to its website, specialises in debt-based lending to "stressed and distressed securities".
Liverpool's loans, understood to be around £180m owed to the Royal Bank of Scotland and £57m to Wells Fargo, are due to be repaid next month, although later than 6 October, which has generally been understood to be deadline day. Broughton has been trying to sell the club, which would see the loans repaid in full, but his hoped-for target date of the end of August has passed and no deal is realistically on the horizon.
The sudden spectre of Hicks obtaining an offer of new finance from GSO or another lender, to replace the loans from RBS and Wells Fargo at more burdensome interest rates, is expected to be opposed by the board majority. The three directors are likely to argue it would place the club in a worse financial position, and therefore not be in its best interests. Broughton, Purslow and Ayre are understood to have blocked another proposed refinancing presented by Hicks in June, and obtained advice from the City law firm Slaughter and May that they had legal authority to do so. Observers of the process believe Hicks's discussions are an effort to retain control of Liverpool before RBS's loans expire, and are unlikely to deliver a better deal for the club.
Hicks and Gillett promised to usher Liverpool to a more prosperous future when they took over in February 2007, saying theirs was not a "Glazer-style" debt-laden deal, and they would build the club the long-planned new stadium on neighbouring Stanley Park. It soon became clear the £185m they borrowed to buy Liverpool was indeed being made the club's responsibility to repay, and the stadium project has not even been started. As Liverpool's cherished status in English football slides, Anfield supporters have become increasingly vociferous in their campaign for Hicks and Gillett to go.
Broughton is said to have been unable to find a buyer so far because Gillett and particularly Hicks are seeking a large profit personally on the £185m cost of buying the club. A new buyer will have to pay the £237m debts in full, so a major profit to Hicks and Gillett – the figure of $600m (£390m) has been cited – makes a purchase hugely expensive, with the stadium, possibly costing £450m, to build as well.
The difficulty of finding a buyer while Hicks and Gillett can set the price, and the likelihood that any refinancing will be blocked by the other three board members, means the spotlight is turning on what RBS will do if its loans are still outstanding at the October repayment deadline. The bank, which collapsed in the financial crisis and is 84% owned by the British taxpayer, has always stressed it does not want to take control of Liverpool. It may instead offer to renew the loans, but with conditions attached requiring Hicks and Gillett to sell above a certain defined price.
All of which, as Liverpool prepare for their momentous visit to face Manchester United at Old Trafford tomorrow, depicts a club a very long way from healthy.
Totally agree with that..
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