Liverpool owners repay debt as loan talks continue
Liverpools American owners have reduced the clubs debt to $412 million as negotiations continue over a refinanced long-term loan with Royal Bank of Scotland, an executive familiar with the talks said Monday.
Tom Hicks and George Gillett Jr. have paid back nearly $66 million on the loan used to purchase the club and are expected to pay about $33 million more in the coming months, the executive told The Associated Press. He was speaking on condition of anonymity because the talks over a refinanced loan were still ongoing.
He said Liverpool managing director Christian Purslow, who also works for private equity firm MidOcean Partners, is in talks this week with RBS about a new long-term financial package.
The American duo were granted a re-negotiated loan of $576.8 million in January 2008 from the Royal Bank of Scotland and Wachovia, but had only been using about $478 million by the time the terms expired during the weekend.
Hicks and Gillett bought Liverpool in 2007 for nearly $287 million, taking on about $73.8 million in liabilities. They have been criticized by fans for burdening the club with so much debt.
RBS received complaints from fans about their ongoing support of the owners, and the bank took the unusual step last month of reassuring fans about the clubs financial health in an e-mail.
RBS is now Britains biggest government-controlled bank as a result of an industry bailout last year. One major fans group led calls for the bank to pull the plug on the owners loan since taxpayers had effectively bailed out RBS.
Liverpool has less debt than the other so-called big four teams in the Premier League.
Champion Manchester United, which is owned by the American Glazer family, has debts of more than $1 billion, Chelseas obligations to owner Roman Abramovich from his interest-free loans are more than $560 million, while Arsenals debt has soared to some $525 million.
In the run-up to the new deal, Hicks and Gillett have been shoring up their financial positions in North America.
Gillett sold the NHLs Montreal Canadiens, the Gillett Entertainment Centre and the Bell Centre back to the Molson family for a reported $580 million.
Hicks is looking to sell baseballs Texas Rangers, but intends to keep the NHLs Dallas Stars. The holding company that owns the teams recently defaulted on about $525 million in loans.
