As the deadline for the Royal Bank of Scotland’s loan edges closer to closer, and with no real serious bids for Liverpool seemingly on the horizon, I thought it might be interesting to debate what will happen after October 6th. The three most likely outcomes are:
RBS call in the debt – After agreeing to a six month extension of their £237m debt so as a sale can take place; RBS will be extremely reluctant to offer Hicks and Gillett more time to sell the club. If they are unwilling to extend the loan once more they will call in the debt and the American owners would default on the loan. At this stage, the bank could enforce the insolvency of the club and put it in administration, but this is highly unlikely to happen in any circumstances, especially considering the relative financial health of the club’s commercial operations. Christian Purslow said today:
“Liverpool Football Club is a very healthy business. We have cash, we are solvent, we have banking facilities which last beyond the end of next season and we are heavily scrutinised by the Premier League. To achieve our Uefa license we went through that process and they were very happy with what they saw – so I cannot conceive of a situation where Liverpool Football Club could go into administration. Liverpool Football Club is not going bust. We have an extremely healthy business with record revenues and we are highly profitable.”
The most likely outcome without the American owners in the way is that they will try to sell the club at a low price, recovering the amount they allowed Hicks and Gillett to borrow. They have already moved the Reds to their Global Restructuring Group, who handle their toxic debts and overleveraged buyouts. The policy of the division is “the management of any problem lending portfolios,” but rather than keeping the club as a subsidiary the more likely option would be to “maximise debt recoveries.” Their policy would be sell the club at a knockdown price as quickly as possible.
A Renault Mégane was driven from Menton, France to Gisburn, Lancashire. Can a car change a town?
My feeling is that any interested parties are waiting for RBS to take control so that they will be able to purchase the club at a knockdown price, lets face it the americans are asking too much for the club, and any would be investor would be crazy to meet their valuation, especially as everyone knows that the club we be on the cheap once the americans are out of the picture, lets just hope the right buyer is waiting in the wings, also note that Christian Purslow has stated today that several potential buyers are going through due dilligence, maybe they are just biding their time waiting for ^th October?
I wouldn’t be surprised to see another short term extension, hoping for a sale, the idea of the bank taking over is not something I think will happen, I’m not up with the way these banks work but it just seems like too much work for RBS to tale over, if they see proof that there are possible birders considering a buyout
It’s ridiculouis to think the club is going bust. A look at the accounts will tell you that isn’t the case. The club will be sold but not at the current asking price. The media take delight in writing anything about The Reds. No other English club is subjected to such examination.
there’s no way hicks and gillette will want to lose money from liverpool without putting up a serious fight, they are conmen who dont care about liverpool and dont care if liverpool ends up ruined as long as they make profit. So dont be surprised if their ownership drags on well beyond october
Dont keep blaming Hicks and Gillett – the other 3 need to WAKE UP and FORCE THE SALE
the sooner the better the sale of the club is ressolved the sooner every thing can settle down and we ll know where we are with money and future signings .we need to be in the champions league and we need to start properly challenging for the premier league its just not good enough !ynwa
I have a feeling their will be another short term extention as well but all other possible buyers are waiting for that knock down price, wouldn’t you!
we all know too well that if any sort of extension is given the yanks are going to continue their greedy ways and try to squeeze 800m out of the buyer. there might be some progress made then they get difficult and we’re left in limbo again. giving them an extension is a waste of time, so for god sake RBS just take some action, repossess us and make sure that they leave with nothing. then we’ll finally have someone who’d actually pay for us. come on Sheikh Khalifa!
Lee
i agree you: “come on Sheikh Khalifa” lokk at my avatar 😉