The American owners £225 million debt has suddenly become the club’s £350 million debt as Tom Hicks and George Gillett sealed the refinancing package which will enable stadium work to be commenced. According to reports £160 million is debt on the club, and £190 million debt on Kop Football Ltd, personally guaranteed by the two chairmen.
The plans for the new ground were unveiled earlier (very similar to the approved design) but the real news from today is that despite their original claims of ‘investing’ in the club, both Chairmen have put the vast majority of the risk on to the club. In fact they wanted to put the entire sum on the club, but the banks refused to over-value the club.
Here are some quotes from 12 months ago.
Gillett:
“It’s a well managed club but we believe we bring some experience which the management can draw on to make things even better. Tom and I are a little put off that people assume everything is about money, because we really hope we have some ideas as well as some capital. “
“From the players’ point of view, the best thing that can happen is that they feel nothing has changed except for a new stadium being built and more aggressive support in the transfer market.”
Hicks:
“It’s been an uncertain time for the fans over the last few weeks, so how can you reassure them that the club they cherish so much is moving into safe hands? “
Wolves in Sheep’s clothing.
The full text of the business release is as follows:
Kop Football (Holdings) Limited (“Kop”), the owner of Liverpool Football Club (the “Club”), is pleased to announce the successful completion of a £350 million financing package.
In addition it is pleased to announce confirmation of the selection of the architectural firm HKS, Inc. as designer of the Club’s new stadium at Stanley Park.The Financing Package
Kop has secured a £350 million financing package, led by The Royal Bank of Scotland and Wachovia Bank NA, which replaces previous financing that had been due in February 2008. The new financing will meet all of the Club’s current financial needs and includes facilities to support the commencement of construction for the new stadium at Stanley Park and to provide working capital for the Club and future player transfers. Of the £350 million financing, £105 million is Club-level debt that will be used to fund commencement of construction of the new stadium at Stanley Park, for future player transfers, and to meet the Club’s working capital needs.
The other £245 million will be at the holding company level and was used to refinance the £60 million of debt that was on the Club’s books at the time of last year’s acquisition as well as the loan related to the share purchase at that time. The overall financing is being supported by a combination of owner cash, letters of credit and personal guarantees totaling £225 million, ensuring that the Club remains on a sound financial footing.
Tom Hicks said: “This new financing package is a strong vote of confidence in the Club’s financial strength and a recognition of the exceptional opportunity represented by the construction of the Club’s new state-of-the-art stadium at Stanley Park. The successful completion of this financing package is particularly significant in light of the currently challenging credit-market environment. With the refinancing process now done, Club supporters can look forward to the timely commencement of construction work on the new stadium and renew their focus on actions on the pitch.”
The New Stadium:
Confirmation of the selection of HKS was based on the firm’s successful development of an improved stadium design that meets the objective of a cost-effective, supporter-friendly design. The new stadium, scheduled to open in August 2011, will ensure that Liverpool Football Club and its supporters get the much-anticipated groundbreaking iconic design at a capacity of approximately 71,000 seats, significantly more than is currently available at Anfield.
The new stadium will feature enhanced amenities for the Club’s supporters while preserving the history and traditions of Anfield and the Club itself. It will be anchored by an expanded 18,500-seat standalone KOP, an increase of more than 5,000 seats.
Kop also announces the appointment of KUD International as project manager for the stadium. KUD, which will establish a Liverpool office to oversee the project, has developed projects globally, including Silvertown Quays, a large-scale mixed use scheme in London, as well as collegiate and professional stadiums in the United States including the Philadelphia Eagles’ Lincoln Financial Field and the San Francisco Giants’ AT&T Park.
Laing O’Rourke, the largest privately owned construction firm in the UK, has also joined, and provides further depth of experience to, the project team. Laing O’Rourke is currently working with developer Grosvenor on The Paradise Project in Liverpool – Europe’s largest city-centre regeneration scheme.
Tom Hicks said: “HKS has developed a more efficient design that, at the same time, is just as stunning as its original design. Liverpool supporters should have high expectations for the future: a premier sporting experience at their new stadium at Stanley Park and a winning Club on the pitch for years to come.”
Football Operations:
In response to questions recently raised about owner support of Rafa Benitez as Manager, Tom Hicks today commented: “Since the meeting with Rafa on December 16th, at which some widely reported communications issues were discussed, Rafa has been assured that he has continuing and enthusiastic support as the Club’s Manager.
“Reflecting that support, Kop recently approved his transfer payment request to sign Martin Skrtel for £6.5 million and is in discussions with Rafa and Club management regarding additional player signings this summer.
“Rafa is under contract for two more seasons following this season. I am solidly behind Rafa and am confident of the team’s competitive prospects under his continuing leadership.”