Yanks trying to get refinance against Anfield, Players and future revenue

[Marko121]

Liverpool board would block mortgage attempts - Barclays Premier League - ESPN Soccernet

 

By Harry Harris, Football Correspondent

 

September 7, 2010

 

Liverpool's owners George Gillett and Tom Hicks attempted to refinance their loans this summer by mortgaging the club's remaining assets - the stadium, training ground, players and guaranteed TV revenues.

 

There are fears the American owners might attempt another refinancing deal ahead of the October 6 deadline to repay £237 million owed to Royal Bank of Scotland, plus the £60 million of additional fees run up since April.

 

But the rest of Liverpool's five-man board would - once again - legally block any attempt to use the players or stadium as 'assets' to raise a mortgage to pay off existing debts. Any refinancing will be opposed by the board who can outvote Hicks and Gillett 3-2, but the Americans might issue a legal challenge.

 

At present, the £40 million annual interest repayments come directly from club profits but ESPNsoccernet has learned that the debts are not loaded against the stadium and players.

 

When Hicks and Gillett tried to find a new £290 million 'mortgage' using the stadium and players as assets a few months ago, the board threw out the proposal and took legal advice to ensure that they were within their rights to do so.

 

With the October 6 bank deadline rapidly approaching, Hicks and Gillett stand to lose their stranglehold on Liverpool if RBS chooses to take over the club and hand it over to their asset recovery experts to sell as a distressed asset.

 

An RBS effective takeover of the club from the October 6 deadline would meet with Premier League approval. Liverpool have also informed the Premier League and UEFA that they have set aside financial measures to ensure that they can continue to pay the £8 million-a-month wage bill and fulfil their fixtures this season.

 

When asked if the club could still afford their substantial wage bill, a spokesman said: "Liverpool FC has prudent working capital facilities that allow the club to make proper provision for outgoings as and when they arise. These working capital facilities are totally satisfactory to both the Premier League and UEFA."

 

The annual wage bill in the 2008-09 accounts was £90.8 million and this year the figure will be around the same, but for the first time Liverpool have dipped into the red.

 

When asked whether the crippling £40 million interest repayments which wipe out all operating profits are paid monthly, putting a strain on the club's cash flow, the response was that, as such detail is not a matter of public record, the club have declined to answer.

 

However there are fears that the club is heading for financial meltdown unless a new owner can be found, and so far there are no "credible" bidders. There has been nothing from a mystery bid involving Keith Harris, let alone the Kenny Huang bid that also failed to materialise.

 

City experts are now estimating that Liverpool's price tag in an RBS fire sale could be as little as £150 million, far short of the original expectations of Hicks and Gillett, who demanded £800 million and then dropped their asking price to £600 million.

 

Talk of a takeover before the transfer window proved to be a disappointing false dawn, and City financiers believe the value of the club will now plummet.

 

Liverpool suspect that potential new owners are waiting to grab the club for a knock-down price when RBS faces the prospect of selling the club itself from the October 6 deadline, when the bank's £237 million loan has to be repaid.

 

 

We are in (even more ) serious shit if this happens

[Coro]

How can board members have more of a say and outvote the shareholders (the people employing them)?

[Captain]

Of course they're trying to refinance, it would be a shock if they didn't.

 

Make sure you don't put a penny in their pockets, which unfortunately too many keep doing.

 

Do. Not. Give. Them. Cash.

[melons]

By Harry Harris, Football Correspondent

 

More importantly, what were his parents thinking?

[Wor Horse]

Harry Harris talks out of his second name doesn't he?

[Trucker Paddy]

How can board members have more of a say and outvote the shareholders (the people employing them)?

 

RBS appointed 2 of them

[Coro]

RBS appointed 2 of them

 

They did?

 

The owners appointed Broughton.

 

I'm pretty sure the owners appointed Purslow too.

 

Let's say you're right though, that's still 3-2 in favour of the owners.

[Trucker Paddy]

They did?

 

The owners appointed Broughton.

 

I'm pretty sure the owners appointed Purslow too.

 

Let's say you're right though, that's still 3-2 in favour of the owners.

 

April 2009 the 4-4 Draw with Arsenal, the Owners sitting side by side for first time in over a year alongside Christian Purslow and several big wigs from RBS, basiclly saying all is good its happy families here.

April 2010 RBS deadline has now passed for £100m to be paid off, there about to call in the loan when H&G plead for more time, RBS order them to appoint an independent chairman hence Broughton is appointed.

Ayre although was appointed by the owners I really believe he wants to do the right thing by the club, so the board now is 3 against 2, and the Yanks cant get rid of Ayre has a board member can only be fired if out voted by the board, which wont happen as Broughton will have the deciding vote.

[Coro]

April 2009 the 4-4 Draw with Arsenal, the Owners sitting side by side for first time in over a year alongside Christian Purslow and several big wigs from RBS, basiclly saying all is good its happy families here.

April 2010 RBS deadline has now passed for £100m to be paid off, there about to call in the loan when H&G plead for more time, RBS order them to appoint an independent chairman hence Broughton is appointed.

Ayre although was appointed by the owners I really believe he wants to do the right thing by the club, so the board now is 3 against 2, and the Yanks cant get rid of Ayre has a board member can only be fired if out voted by the board, which wont happen as Broughton will have the deciding vote.

 

BarCap/Broughton were appointed by the owners. Broughton made this clear.

 

I think it's dangerous to assume that RBS forced this.

 

Ayre has been an employee of the club for sometime working in the interests of the owners. He's a long time friend of Hicks as well, isn't he?

 

It's never been made clear about who exactly appointed Purslow in a temporary role that has since become all the more permanent. We know he is good friends with Stephen Hester of RBS but we also know he has past ties with Hicks.

 

Again i think it's dangerous to assume any sort of distance between those 2 men and their employers.

[Kopite Pete]

 

RBS appointed 2 of them

 

Which makes it bizarre RBS want their money back but their members are stop H&g efforts.

[WilliamW]

Cancer/AIDS haven't been able to fulfill their obligations to the bank (RBS), hence the bank is in control.

[Torvald Utne]

Can someone who knows about business law explain how the outright owners of a private unlisted company could be in a position where they could be overruled on decisions regarding their own business?

[barosrocks]

Can someone who knows about business law explain how the outright owners of a private unlisted company could be in a position where they could be overruled on decisions regarding their own business?

 

I'm no expert in Business Law, but I'm pretty sure it's because they're a pair of cunts

[edge of darknes]

RBS appointed 2 of them

 

Nope, RBS didnt.

 

However, the owners gave a legal undertaking that they will not veto the sale process and by attempting to re finance, they effectively encroached on that undertaking.

 

As such, the other board memebers could and did prevent them progressing the refinancing.

 

I do wonder though if there is some means the owners can remove their appointees on the board ie sack them and revert to them calling the shots again.

 

Even so, if they dont or cannot do this before the re financing deadline, RBS may deliver the a knock out blow by taking control and ejecting them.

Edited September 7, 2010 by edge of darknes
to correct owner to owners

[Anubis]

I do wonder though if there is some means the owners can remove their appointees on the board ie sack them and revert to them calling the shots again.

 

It needs a special resolution from the shareholders (75% of shareholders) to do it, I think. AWS did post the exact amount some months ago. But yes, I think it can be done. Unless the extension agreement with RBS prohibited them trying - but I suspect such a term would be unenforcable.

[Torvald Utne]

doesn't hicks own 50% and gillette the other 50%?

[razor]

More importantly, what were his parents thinking?

 

"Henry" isn't so bad. They obviously didn't predict the shortened version.

 

He used to work for the Mirror in the 90s, then moved to the Express if I remember correctly. And now? Well, "Soccernet". Oh dear. Actually, probably one up from the Express on reflection.

 

But anyway, I've always disliked him. He was the first to continually use the phrase "I understand..." and "Contacts have told me...." in every article he wrote so you'd have to look at the by-line to see who "I" and "me" was. Self-regarding buffoon.

 

Lookayou now, eh. Just lookayou now!

[G Richards]

It remains to be seen what will happen, but I suspect the board will block all attempts at refinance with a 3-2 vote in the best interests of the club. The club will then go to RBS who will sell it off to claw back the money owed to them. My hope is several have already done due diligence and will be ready to step in and save the day. Like most on here, I'm not clamouring for a sugar daddy - just someone who will buy the club with their own money, put a little into the squad to play catch up, and then build a new stadium with a combination of sponsorship and a mortgage, paid for with increased revenue from extra seats.

 

My hope is all of this will go through sometime later in October, which will then give the manager time to sit down and identify a couple of canny January targets. Hopefully we won't be too far out of it by then, and the strengthening in January will boost us to finish top four, retain Nando, have a good summer, and then get back to the business of hoping for titles again.

 

*Praying it works out like this*

 

The one main downside with the owners is a possible legal challenge to the block of refinance, should they be able to find someone who is stupid enough to want to lend them money. Hopefully the other board members have already looked into this and they have a robust legal case and will get the club moving forwards again.

[llego]

The article states that the refinancing was blocked because it was attached to a proposed mortgaging of the stadium and club grounds. Do we know if the board has the ability to block refinancing, period, or if it can only do so in special cases such as these?

[Jim MM]

doesn't hicks own 50% and gillette the other 50%?

 

Yes, but if they used that 100% as security for loans and then defaulted on the repayments they stand to lose it. I'm hoping that's effectively what happened last April but a deal was struck so RBS didn't have the hassle of owning the club and The Custodians got the illusion of being in control.

Granted that's a lot to hope for but it's a possibility that helps me sleep.

[Unrighteous]

Right, I'm going to need some things if I'm going to do this:

 

A lot of hot hookers, a lot of viagra, a first class plane ticket to the USA, a high-powered rifle upon my arrival, ammo, snipers mat, camoflage, a per diem to cover expenses and a rental car. (Please have the hookers interspersed throughout my mission... err... trip.)

[Malarkey]

Haven't these two knobheads gone yet?

 

Man, these are two desperate pair of cunts.

[Redshadow]

Unrighteous? The frightening thing is that what you suggested is probably (barring a Judiciously aimed Celestial Thunderbolt or Two) the ONLY way we will be absolutely CERTAIN to be rid of these two vampires. You KNOW it must be desperate when the Only way you can be utterly certain of being rid of owners that are millstones around the club (and ANY progress forwards) is by contracting ahem, shall we say "Accidents" out on them - Unfortunately, we are now Very close to that point - the sonoer they are forced out by RBS (and they Will be..eventually) the better for all concerned I think.............

[lifetime fan]

I've an idea.

 

Lets not give these cunts the money they need to keep the club. Hardly original but until the simpletons recognise this they will fight tooth and nail to keep us.

[Spy Bee]

Everyone move any change from your window sill and put your wallet in your front pockets. We must do everything to prevent these ubermongs from getting a single penny more.