Liverpool in turmoil after owners lose 46m in year
THE FUTURE of Liverpool owners Tom Hicks and George Gillett is in “significant doubt” unless £350m of debt is refinanced before next month’s deadline, the club’s accountants KPMG warned last night.
Kop Football (Holdings) Ltd, the parent company of Americans Hicks and Gillett, made a £42.6m loss for the year ending July 2008, according to accounts published yesterday.
That vastly outweighed the £10.2m profit that the club made, and dampens the optimism generated by the team’s strongest challenge for the Premier League title in years last season. It also increases doubts over the duo’s long-term ability to keep hold of the club.
The £350m credit facility is due for repayment on 24 July and although Hicks and Gillett have insisted work is underway to secure a refinancing arrangement, the lack of an agreement with so little time remaining has given KPMG cause to issue a stark warning.
The accountants said: “The directors have initiated negotiations to secure the replacement finance required by the group and these negotiations are ongoing. These conditions… indicate the existence of a material uncertainty which may cast significant doubt on the group’s and parent company’s ability to continue as a going concern.”
Uncertainty over long-term financing means Liverpool’s plans to relocate from Anfield to a new stadium in the city’s Stanley Park are likely to be delayed until 2012, the report added.
Liverpool recorded a record turnover of £159.1m last year, up more than £15m from the previous 12 months, of which £10.2m was pre-tax profit.
The majority of the losses made by Kop Football (Holdings) Ltd was in interest payments of £36.5m, with millions more spent on preparations for the stadium.
Hicks and Gillett are said to be undisturbed by the situation and are understood to have been in talks with RBS about extending the deadline, initially for another six months.
The pair bought the club for £174m in February 2007, but have endured a chastening tenure at the helm, involving disputes between directors and manager Rafael Benitez, financial uncertainty and supporter unrest.