Dubai International to make bid for Liverpool FC

[Red Chilli]

I know nothing about business, but to my mind if the debt is placed on the holding company, is the club not an asset of the holding company? meaning the holding company can sell the clubs assets (players, training facilities, ground etc) to service the loan?

So effectively by putting the debt on the holding company the fact the debt is on the not on the clubs books is a mere technicality

correct (I think)

[Manofthebog]

Tom Hicks: Re-financing deal will go ahead
Jan 23 2008 by Tony Barrett, Liverpool Echo

LIVERPOOL co-owner Tom Hicks remains confident the long awaited refinancing deal will be signed, sealed and delivered tomorrow.

Sources close to Hicks told the ECHO that it is now just a matter of ironing out a few minor details with the Royal Bank of Scotland and American investment bank Wachovia, and that the American’s stance that he is not interested in selling the club to DIC has not altered in any way.

As well as privately committing himself to announcing the financial restructuring deal tomorrow, Hicks has informed confidantes he will also reveal finalised plans for the new Anfield at the same time.

“Tom is in no doubt that the deal with RBS and Wachovia is going through and he is looking forward to revealing the new stadium design which is every bit as spectacular as promised,” said one source.

“There are a few minor glitches to be ironed out but nothing major – it’s pretty much just standard procedure for a deal on this scale.”

Should the deal be completed tomorrow it will result in a £350m loan being taken out. But, under the terms on the table, the entire debt will not be taken on by Liverpool.

The ECHO understands the club will take on £105m, Kop Investment, the holding company set up by Hicks and Gillett in the immediate aftermath of last year’s takeover, will take on £190m, with the co-owners having been asked to put up £55m of their own money.

The fact that the loan is being arranged in this way represents a minor victory for David Moores and Rick Parry, who successfully argued with Hicks that the entire debt should not be loaded onto the club.

Moores and Parry, who remain on the Liverpool board, refused to budge from this position and their stance was one of the main reasons why the financial restructuring deal is only now nearing completion.

Had they capitulated, the likelihood is Liverpool would today be saddled with a debt of £350m.

But should the duo be removed from the board for any reason at any point in the future, there would be nothing to stop the entire debt from being shifted onto the club.

If Hicks’ plans come to fruition tomorrow as planned, the next stage of his plans will be the hunt for a further £300m loan to finance the construction of the new stadium.

Meanwhile, Steve Finnan has announced his retirement from international football.

The Reds full back has informed the Republic of Ireland that he will not make himself available for future matches, bringing to an end an international career which brought him 50 caps.

He said: “I’ve thoroughly enjoyed my time in the Republic team, with the World Cup in 2002 being the highlight of my international career.

“But I’ll be 34 when the next tournament comes around so it’s the right time for me to step down.

“There will be a new manager coming in soon who will have his own ideas for the future with younger players having the chance to stake their claim to be in his plans.”

While one Liverpool player’s international career comes to an end, another is just beginning.

Lucas Leiva has been named in the Brazil squad to take on the Republic of Ireland at Dublin’s Croke Park on February 6.

[tomasjj]

**** that. They need to go!

[Pablo]

Should the deal be completed tomorrow it will result in a £350m loan being taken out. But, under the terms on the table, the entire debt will not be taken on by Liverpool.

The ECHO understands the club will take on £105m, Kop Investment, the holding company set up by Hicks and Gillett in the immediate aftermath of last year’s takeover, will take on £190m, with the co-owners having been asked to put up £55m of their own money.

Am I right in saying then that out of the £350 million loan £295m will affectively be put on the club. Who is responsible for paying the Kop Investment side of things, the club?

Either way they have lied about not putting any debt on the club. So far we are now in at least £105m of debt and that is without the inevitable spiraling costs of building the new stadium and paying off a huge loan that will probably have a ridiculous interest rate as they were so desperate to get a loan at any cost.

[Tom]

Kop investement's only assets are the club, ergo kop investment must take it's repayments out of profit generated by it's only assets. Can't see how it could be any other way.

[Pablo]

Kop investement's only assets are the club, ergo kop investment must take it's repayments out of profit generated by it's only assets. Can't see how it could be any other way.

So that debt put on Kop Investments may as well be put directly on the club then?

[dawmdt]

Am I right in saying then that out of the £350 million loan £295m will affectively be put on the club. Who is responsible for paying the Kop Investment side of things, the club?

Either way they have lied about not putting any debt on the club. So far we are now in at least £105m of debt and that is without the inevitable spiraling costs of building the new stadium and paying off a huge loan that will probably have a ridiculous interest rate as they were so desperate to get a loan at any cost.

Well Kop Investments are responsible for paying it but as it's the club's parent company I imagine the club will still pay for it. I can only assume it's been structured like this so should it default the club itself is "only" responsible for maintaining the 105mm loan and thus if Kop Investments decides to sell the club then that's the "only" debt that any new buyer would take on.

Complete speculation and grabbing at straws here but perhaps it's been structured like this to allow a buyer to purchase the club from Kop Investments with a much smaller level of debt (I'm guessing this debt covers interest so far plus players purchased, the outgoings since G&H took over) and for that purchase money to be used by Kop Investments owners (G&H) to pay off the K.I. part of the debt with the remainder being their nice little profit. Why bother? As has been said many times, the original loan runs out really soon and it's unlikely any future club sale would complete in that time...

[Tom]

What other income does Kop Investments have?

[disco]

So that debt put on Kop Investments may as well be put directly on the club then?

It certainly seems that way, unless it's also backed by their other businesses.

Probably a mixture of the two.

[carlton]

So that debt put on Kop Investments may as well be put directly on the club then?

no not really-if LFC dont make a profit the yanks have to pay the interest bill on Kop Investments from there own pockets. Also theres a lot less debt on the club-at the moment.

[disco]

Just a thought, but presumably Hicks and Gillet can use income from any of their businesses to pay for the loan.

Anyone know whether they have other businesses making money?!

[Pablo]

IMO if this is true (even the £105m) Parry should have the decency to consider his position and resign as he will have failed our club. We were guaranteed no debts would be placed on top of the club. We were lied to. Simple as that.

[Guest]

Could we expect DIC to make a move just after these plans becoming official ?

[shanks69]

"Taking a break" from the CL may not be a bad thing for one season.It may force the Yanks to sell and would also force Rafa to concentrate on winning No.19.

God I hope they are gone much sooner than the summer. If it drags on that long I think there may even be a chance we wont be playing Champions League football next year. The sooner we get this sorted out the sooner our form will pick up.

but we need cl football to attract the better players.

[Pablo]

Could we expect DIC to make a move just after these plans becoming official ?

I think we can only hope mate. If anything them getting refinancing means their hand isnt as forced and they can choose to hold onto the club if they so wish.

It certainly doesnt mean its the end for DIC but I would assume they would now have to pay more money to acquire the club.