Liverpool agree new refinance deal with RBS and Wachovia Bank

Liverpool football clubs joint owners have agreed a new refinance loan with Royal Bank of Scotland and Wachovia. The details of the new deal which is believed to be for another year, means Tom Hicks and George Gillett repay £60 million of the outstanding loans that will “reduce the debt to £230 million,” reports the Telegraph. £40 million is expected to be repaid this week, with the remaining £20 million due later in the year.

The original loan taken out by the owners in January of last year was for £350 million, however “Sources with knowledge of the deal” say that “figure has already been reduced to £290 million since last summer, and will come down by a further £60 million as a condition of the new deal.”

Club managing director Christian Purslow is understood to have negotiated the loan with the banks, who insisted on the £60 million repayment “as a condition of extending a loan facility.” By paying off £120 million of the outstanding debt, the Americans will reduce their annual interest payments, but it is possible the banks may have demanded a higher rate to extend their line of credit.

Liverpool’s owners unable to meet Friday’s loan deadline

Liverpool Football Club’s American owners, Tom Hicks and George Gillett Jr. were unable to secure an extension to their £350 million loan before Friday night’s deadline.

The co-owners, had reached an agreement in principle two months ago with the Royal Bank of Scotland (RBS) and Wachovia about refinancing their existing loans. However Friday night’s deadline passed with Hicks failing to provide the guarantee, “a sum believed to be in the region of £70 million, that Wachovia had requested,” claims The Times.

“That deadline has been described by sources as “fluid”, with negotiations set to continue into next week,” adds the story.

Gillett has raised capital through the sale of his ice hockey franchise the Montreal Canadiens, However the story suggests Hicks who’s “sporting and business empire has been hit hard by the global credit crunch, has been forced to request extra time in his attempt to satisfy Wachovia.” However the American businessman “is said to be optimistic that a solution will be found.”

Uncertainty over the ownership of the club is bound to continue, even if Hicks and Gillett succeed in securing another short-term loan.


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Hicks and Gillett will re-finance LFC loan

The former Football League chairman Keith Harris, believes that Liverpool co-owners Tom Hicks and George Gillett are likely to succeed in refinancing their £350 million loan from RBS and Wachovia banks before the July deadline claims today’s Telegraph. Harris, speaking at the Soccerex forum at Wembley Stadium, said. "I think there will be a negotiated settlement,"

"The only way banks can make money is to start lending again. The two banks RBS and Wachovia, have said they don't want to be involved in this kind of business and RBS are quite stretched.

Harris believes Premier League clubs have suffered a slump in value of up to 20 per cent since the economic crisis struck.

Harris said: "There is some renewed interest now. There's been a shocking fallow period but just like you are seeing investors putting money into property companies and banks, people are investing again in football clubs.