Friday, 24 July 2009

Reds fan buy out plan proposed by 'Share Liverpool' and 'Spirit of Shankly'

Supporter groups ‘Share Liverpool’ and ‘Spirit Of Shankly’ have announced a an ‘buy out’ proposal today. The current American owners bank refinancing deal deadline runs out today, but it is expected RBS & Wachovia Banks will extend the credit line for Gillett and Hicks. The proposal which was released via the Share Liverpool web site aims to Initially raise £500m from 100,000 LFC fans who would pay £5,000 for a single share. Feedback received from SLFC registrants and SoS has convinced SLFC that reducing the ‘entry fee’ from £5,000 to £500 is the best way forward, as it ensures a much broader base of fans can get involved. Subsequently, they have put together a revised proposal.

The revised proposal is designed to achieve:
Fan ownership of Liverpool FC
A much broader base of that ownership by reducing the entry price for a single share from £5,000 to £500
One member: one vote
A way in which fans who can afford to put in more than £500 can receive a return of 2%
A way commercial investors can participate

The fan groups are looking to raise £150 million from LFC fans to initially acquire a 60% interest in the Club:
Approximately £10 million to come from the sale of £500 shares in ShareLiverpoolFC on a one person one share basis

Approximately £140 million to come from shareholding fans acquiring SLFC Loan Stock which gives them a return of 2% a year

In addition to this, they are seeking a commercial partner to invest £100 million in return for a 40% interest in the Club, through a combination of loan stock and equity shares. This raises in total £250 million which can be used to pay down £250 million of the current £350 million of bank debt.

The £100 million balance of current bank debt would be exchanged for convertible loan stock in LFC, which SLFC would have rights to acquire from the banks in equal annual instalments over a 20 year term. Acquisition and conversion of the LFC loan stock would eventually raise SLFC’s equity interest in the Club to 71%.

The SLFC Board issued the following statement: “This is a realistic plan that squares the circle: How to get broadly based fan ownership of the Club, and relieve the level of debt, by offering Liverpool fans an affordable entry fee and a chance to get a modest return for their additional financial support. Now we need all those Liverpool fans to carefully consider the proposals in detail on our website – and let us know what they think”.

A Spirit of Shankly spokesperson added: “This new proposal is a sound, sensible and workable plan which offers the only real solution for the Club: long term financing that isn’t supported by short term – and expensive - bank debt. The new proposal can do precisely that.”

Supporters Direct Chief Executive, Dave Boyle, said:
“This proposal is the only sensible, sustainable offer that’s been put forward that also meets the crucial community requirements. Community ownership is something both the Government and UEFA are strongly supportive of, and this proposal is very much in line with that. The Club seems to be at a crossroads. It will either continue to be owned by a group of distant people with an eye on the bottom line, driven by the need to pay off colossal debts, or owned by the community, like Barcelona or Bayern Munich.”

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