Liverpool 'just about' affording bank payments

LONDON (AP)—Liverpool is talking to a “small number” of takeover suitors and the board will still block any attempts by the current owners to refinance the club’s debt ahead of next month’s deadline, managing director Christian Purslow said Wednesday.

While noting Liverpool is “not going bust” and will not enter bankruptcy protection, Purslow warned that the 18-time English champions can only “just about” afford to meet the bank payments to service its debts.

American co-owners Tom Hicks and George Gillett Jr. put the club up for sale in April and faces an October deadline to repay its debt, which has grown from 237 million pounds ($371 million) since April to about 280 million pounds due to penalty charges.

No formal offers have been received for the club, with Hicks seeking about 600 million pounds for the asset he jointly acquired with Gillett in a leveraged takeover for 218.9 million pounds in 2007.

Hicks hopes to stall the sale process by at least two years by finding bank funding to refinance his loans, but American private equity company Blackstone has rejected his proposal to invest and share control with the Texan.

“(The owners) haven't had an offer yet that they like, and so I suspect that both of them individually and collectively are pursuing their other alternatives and that’s their prerogative,” Purslow said on Liverpool’s TV channel.

But Purslow is opposed to the owners refinancing the debt—as are fellow board members Martin Broughton, the chairman hired in April to oversee the sale process, and commercial director Ian Ayre. They rejected an earlier refinancing proposal by Hicks earlier this year.

“Any incurrence of indebtedness by Liverpool Football Club needs full board approval,” Purslow said. “The non-owner directors have made it clear that’s not what we want to see happen … (it’s) very unlikely.”

Purslow said Liverpool is not in danger of entering bankruptcy protection, which happened to Hicks’ baseball team, the Texas Rangers, before being sold in August.

“We have cash, we are solvent. We have banking facilities which last beyond the end of next season, and we are heavily scrutinized by the Premier League,” Purslow said. “Liverpool Football Club is not going bust. We have an extremely healthy business with record revenues and we are highly profitable …

“It is true that far too much of that benefit currently services loans, interest costs and bank charges. Can we afford to meet them? Just about.”

Purslow stressed that any buyer must reduce or eradicate the debt, vowing “not to make the mistake of sanctioning any transaction that puts the club in a worse position.”

“There are a small number of potentially interested parties working seriously and privately doing what is called due diligence—looking at the business in detail from a financial and legal standpoint,” Purslow said. “My hope is that one of those parties steps forward with a proposal to buy the club which is attractive to the board and which would be good for the club … the only thing worse than no sale is the wrong sale.”

Having been runner-up in the 2008-09 title race, Liverpool has now made its worst start to the season since 1992-93, winning only one of its five matches to sit a point above the relegation zone.

Purslow said manager Roy Hodgson, who replaced Rafa Benitez in the offseason, will have funds to spend on new signings in the January transfer window.

“A striker was high on Roy’s list of options (in the offseason) and, yes, we looked at a number of them but none of those he really wanted could be acquired,” Purslow said. “It was Roy’s decision, not the club’s, to wait, keep our powder dry, look at the market and research players more and be ready to strike in the next window or the window after that …

“If he continues to see a new striker as a priority then that's what he'll work on doing in January with the total support of the club and with every penny we have available.”