Liverpool FC chief Purslow: Club board is against any Tom Hicks refinance bid
LIVERPOOL managing director Christian Purslow insisted the club’s board members will firmly resist any attempt by co-owner Tom Hicks to refinance the club’s debts of £237m with Royal Bank of Scotland.
His comments came as part of a Q&A with Reds fans in which he also revealed:
Tom Hicks and George Gillett turned down an offer for LFC before Easter
That refusal to sell led to the board shake-up which brought in Martin Broughton as chairman
The club is “a very healthy business” but can only “just about” cope with the interest and bank charges on the owners’ loans.
Reports have suggested Hicks is trying to raise cash to buy out the RBS debt ahead of next month’s refinancing deadline to retain control at Anfield.
But asked if Hicks could refinance the debt against the club’s assets, Purslow said: “That would require Board approval and the other members of the Board have made it clear that’s not what we want to see happen. It’s very unlikely.
“Any occurrence of indebtedness by Liverpool Football Club needs full Board approval. The non-owner directors have made it clear that’s not what we want to see happen.”
The non-owner directors are Purslow himself, commercial director Ian Ayre and chairman Martin Broughton, who can outvote Hicks and Gillett 3-2.
Purslow said he remains firmly committed to the Sale
of the club and believes Hicks and George Gillett are still keen to sell.
“I can’t speak for the owners but I am absolutely sure that both of them are totally committed to trying to sell the club as soon as possible,” he said.
“They 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.
“I want this club sold more than anybody in the world.”
Earlier this year Purslow, whose family hail from Birkenhead, spoke about his hope of securing significant investment by Easter but it didn’t materialise. By Easter there was at least one investor ready to invest in the club, but not on terms that were acceptable at that time to the owners,” he said.
“I think it’s fair to say that precipitated a further series of changes; the appointment of Martin Broughton as the new chairman, pretty dramatic changes to the Board of directors where George and Tom’s family came off the Board and essentially the Board was re-jigged and, most importantly, the owners agreed they would seek a Sale
of all of the club rather than what we had been working on up to Easter, which was a partial investment, which I don’t think was ever likely to be the optimum outcome for anybody.
“So I think that was a positive development in April and since then we have been working hard to try and find somebody to buy all of the club.”
The managing director shrugged off fears that administration is a real danger to Liverpool Football Club if the club is not sold soon.
“Liverpool Football Club is a very healthy business. We have cash, we are solvent, we have banking facilities which last beyond the end of next season and we are heavily scrutinised by the Premier League.
“To achieve our UEFA licence we went through that process and they were very happy with what they saw – so I cannot conceive of a situation where Liverpool Football Club could go into administration.
“Liverpool Football Club is not going bust. We have an extremely healthy business with record revenues and we are highly profitable.
“The issue today is that too much of that profit is being used to service loans put into place when the club was bought. We are dealing with that issue.
“When we sell the business that debt will be reduced or go away which will make us the most profitable club in the Premier League. Liverpool is not going bust.”
However, Purslow admits too much of the cash generated from the club’s commercial success is currently being wasted on servicing Liverpool’s debts.
He said: “It is true we are doing well commercially. Our business is continuing to grow and our revenues to July 2010 were a record for the club, despite it being a very disappointing year in football terms, which has its own effect on our financial performance.
“Despite a disappointing year on the field, off the field commercial activity was sufficiently strong that our revenues and profits were very healthy.
“We’re very proud of that and it’s very important when attracting investment and new ownership.
“Equally 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.
“Do I wish that every penny spent on interest was available to spend on players? Passionately.” THE ECHO