Liverpool and debt

[Robert Jarvis]

In the Times today there was an article abnout their debt. They are in hock to RBS to the tune of some £300 million. They have been told the debt must be reduced by £100 million by the end of July when their finances come up for review. Their CEO was talking of a share issue to raise the money which will be ring fenced to pay debt. Apparently RBS have told Gillette and Hicks if they cannot reduce the debt then they must put the club up for sale!!

Of course now they are desperate to make the top four for the CL and the money it generates so here's hoping they do not make it.

 

[Axlswhk]

Why is there an urgent need to reduce debt all of a sudden?

 

[gordonjblair]

In the Times today there was an article abnout their debt. They are in hock to RBS to the tune of some £300 million. They have been told the debt must be reduced by £100 million by the end of July when their finances come up for review. Their CEO was talking of a share issue to raise the money which will be ring fenced to pay debt. Apparently RBS have told Gillette and Hicks if they cannot reduce the debt then they must put the club up for sale!!

Of course now they are desperate to make the top four for the CL and the money it generates so here's hoping they do not make it.

I'd rather Citeh got top 4*, and then went out in the qualifiers - bear with me. CL money, or the lack thereof will have a massive impact on the RS, but Citeh won't notice the difference, money is no object to them, so let em have it, and let's see what happens to the RS without it.

*assuming we can't

 

[Columbia6]

Why is there an urgent need to reduce debt all of a sudden?

I know nothing about the financial world, but I would hazard a guess that Liverpool's stability as a financial going cause has come under question because of Rafael the Great and his band of crocked misfits, and the banks are demanding that their liabilities are reduced.

Can someone tell me what a share issue is? Is it the same thing that Man Utd did recently? I doubt it's free money, so what potential problems does it bring with it?

 

[pfim]

No, not the same as Man Utd. Man Utd is offering a bond issue, basically they're asking investors to take on the debt.

The share issue, Liverpool is asking for investors to take on an ownership share of the team.

They're both ways to raise capital to pay off debt, but Hicks and Gillett are offering up an ownership share in the team.

I believe Hicks has found a buyer for his share in the Texas Rangers, so that could help this crunch if he closes that in time.

As far as the urgent need to eliminate debt, the banks probably feel there is too much debt (and probably why they need to sell a portion of the team, rather than refinance through a bond issue like ManU).

 

[ToffeeDan]

Bad timing eh!?

What with the tragedies in places like Haiti and all that there's just no Charity money left for this basket case...

 

[Rook]

I'd hate the be the bearer of bad news but Hicks and Gilette will find their money. They have plenty of assets they could use as leverage and interests rates (which were high when he bought the team) are low now.

The bank is probably wondering why liverpool has been spending more than almost every other prem team while not apparently having enough money to cover debts. They got 35M for Alonso which most of it they blew on Aqualung and his doctor bills when they could have serviced their debt.

If needed Torres, Gerrard, Babel and Macherano will net well over 100M. Only Macherano has been playing regularly out of these 4 and sadly they are hanging around 4th.

 

[Robert Jarvis]

But if they sold those players can you imagine the crowds reaction. Also if they could sell a few assets to raise the cash why have a share issue which would dilute their holdings. Notice that losing a £100 mill would still leave them in charge.

It is RBS we are talking about, you know they got hundreds of billions of taxpayers money to keep them afloat, who wanted to pay millions in bonuses, who have given considerable help to Kraft to fund the take over of Cadbury.

 

[Number_25]

Didn't we nearly go into Administration for that £30m debt owed by Peter Johnson back in 2000?

Shows how much football has changed in 10 years.

 

[Cahill's Metatarsal]

I just hope the debts spiral & they can't afford to pay them off leaving them financially ruined. Hope it happens to City too

 

[harry]

The problem is Lfc will alway have a buyer, they are a worlwide branded name.
If hicks and the other one can't find the money and are forced to sell there will be plenty of investors ready to come in with offers. infact i would't be surprised if this is what the investors are waiting for. Cheap deal for a huge brand.
It could turn out to be the best thing to happen to them

But if they find the money and keep hold of liverpol, they will always be limping along scratching about for transfer money.

 

[Mutzo Nutzo]

The problem is Lfc will alway have a buyer, they are a worlwide branded name.
If hicks and the other one can't find the money and are forced to sell there will be plenty of investors ready to come in with offers. infact i would't be surprised if this is what the investors are waiting for. Cheap deal for a huge brand.
It could turn out to be the best thing to happen to them

But if they find the money and keep hold of liverpol, they will always be limping along scratching about for transfer money.

Agreed....The vermin are a global brand, so very attractive to investors if they could pick them up on the cheap.

The Americans know this and will not want to sell from a weakened financial standpoint, so therefore I see them selling off other assets to appease the bank..

Best case scenario from my point of view would be that they can't sell off any other US based assets, and therefore are forced to sell one or two key assets from LFC (Mascherano, and Torres would be nice).

Either way...The vermin will continue to exist unfortunately

 

[StDomingosGringo]

I claim no knowledge of big business but this is diluting their ownership of the club without being likely to bring in additional money to strengthen the squad or finance a stadium in the near future is it not?

Even if the Sultan of Brunai came in to buy the 100 million worth of shares he's hardly going to pump money in to raise the value of the rest of a club he only owns a quarter or so of. Whoever does buy these shares will just sit on them, invest fook all and then hope the situation deteriorates to increase their stake in the remaining shares later at a knock down price.

Am I being niave or should we be very happy at this state of affairs?

 

[davek]

Speculation is that H&G are looking for investors for a share issue, but they're seeking that at shares priced at what they see them rising to with a new stadium in place. If that doesn't happen then they'll dig into other funds they have or strip the club of assets in red jerseys. These two have ridden out the storm at Anfield and the Glazer's will do so at Man Utd. You have to believe they have their eye on a near-to-medium term future when collective bargaining on tv rights breaks down and they can cash in. These people are ****s but they're not daft.

 

[Columbia6]

Speculation is that H&G are looking for investors for a share issue, but they're seeking that at shares priced at what they see them rising to with a new stadium in place.

Relieved to hear that, pretty much guarantees that this new person won't put a solitary penny towards the new stadium, doesn't it? It'd be like buying a house for its estimated value after renovations, but then paying to do the renovations yourself!

Why are Hicks and Gillette issuing more shares? Doesn't it amount to pretty much the same thing if they sold 25% of their (joint) holding for the £100m?