It seems that the Hicks and Gillett regime at Anfield is nearing its inevitable conclusion.
A club that only 3 years ago had around £15M of debt, is now wading in around £400M of debt. However it is the £260M+ debt that is owed to the Royal Bank of Scotland that is likely to cause the dissolution of the American owners reign.
According to The Guardian, Liverpool’s loan has been reclassified and moved in to it’s Global Restructuring Group. This group is effectively the ‘bad bank’ part of the organisation, created to pile in all the toxic assets from the recent worldwide financial crisis.
The bank is in the unfortunate position (for itself) of being almost fully owned by the UK taxpayer – meaning that ethically and politically it can no longer continue to milk Liverpool for £1M almost every week in interest payments, to enlarge a loan it will never get back.
A number of bidders have expressed interest in Liverpool FC but have walked away from the table as they believe the valuation of the club to be too high. It now looks highly unlikely that the bank will once again extend Liverpool FC’s loan.
The Guardian cites a source at the bank as saying:
“If it has been taken out of the hands of the corporate banking department they’ll have a much more ruthless approach on 6 October.”
RBS would then hope to engineer a quick sale at a reduced rate to ensure they get as much of their loan back as possible.
They could well enforce administration on two of Liverpool’s parent companies (set up by the owners as part of the mysterious money flow) and also George Gillett Jnr’s Football UK – another holding company.
If this second approach were to happen the Premier League would be left with no choice but to hand Liverpool a 9 point Premier League penalty deduction – making the chance of European CL qualification even slimmer.
The storm clouds may continue to gather but hopefully sooner or later the crippling LFC debt will be removed.
The Hicks and Gillett years at Liverpool have brought shame on the club, embarrassment to the fans and everyone connected with the club, created divisions between sections of fans in how to deal with the mess. In a couple of months – Liverpool FC may well, once again, be all about the football.
Liverpool’s loan with RBS runs out on October 6th.