Reds: Liverpool owners Tom Hicks and George Gillett Jr Liverpool's American owners, Tom Hicks and George Gillett Jr, have postponed until 2009 plans to borrow £300 million from banks to pay for the club's new home at Stanley Park, plunging the project into fresh uncertainty. Hicks and Gillett are confident of clinching a separate interim deal before Christmas with the Royal Bank of Scotland and American bank Wachovia to borrow £350 million to refinance a loan used to fund their £220 million takeover last February and pay for initial building work.Hicks and Gillett are confident of clinching a separate interim deal before Christmas with the Royal Bank of Scotland and American bank Wachovia to borrow £350 million to refinance a loan used to fund their £220 million takeover last February and pay for initial building work.
However, The Daily Telegraph has learned that there are now serious question marks over the rest of the money required to complete the move from Anfield. A combination of the global credit crunch and nervousness over the level of debt which will be placed on to Liverpool's balance sheet has forced Hicks and Gillett to abandon plans to raise all the money in one go.
Instead they are now looking to borrow £350 million to pay off a two-year loan with RBS worth approaching £270 million, inject £60 million of working capital for the new ground and cover £25 million of credit notes used to finance the summer purchases of Fernando Torres and Ryan Babel, again provided by RBS.
It is understood that while the £60 million of stadium financing will get Hicks and Gillett through the first 18 months of work on the Stanley Park project there are serious concerns over how they will raise the remaining £300 million needed to complete the stadium, which has been scaled back after the designs came in £50 million over budget.
Sources close to Hicks and Gillett maintain the Americans are confident of raising the money for the stadium in 2009 when it will be two years from completion and easier to secure contracts with future sponsors for naming rights and to predict income from the sale of club seats and executive boxes. But contrary to promises made at the time of their takeover earlier this year, the owners are now preparing to load at least half of the new £350 million debt on to the club.
Banking sources said that, while Hicks and Gillett had now agreed to pump in £20 million each of their own cash to secure the new £350 million loan, one of the main sticking points previously has been the American pair's reluctance or inability to put up their own money. In addition to the £40 million in cash, the pair are also underwriting £75 million in letters of credit and £60 million in personal guarantees. The refinancing of the club's debts means that from next season Liverpool will have to shoulder about £30 million in annual interest repayments.
According to financial predictions for 2008, that will swallow up much of the club's spare cash, making it harder to provide funds for manager Rafa Benitez to invest in his squad. And although Benitez called a truce with Hicks and Gillett following a meeting on Sunday, tensions with the owners are likely to resurface if he is forced to sell players to fund new acquisitions in January.
