BARCLAYS RESCUES LIVERPOOLBARCLAYS is to make a shock intervention at Liverpool FC, backing a £300m refinancing that will lead to the sale of the club.
The bank is this weekend finalising a deal that will see it displace the club’s current lenders, provide additional funds to Rafa Benitez, the manager, and install as chairman Martin Broughton of British Airways. Barclays Capital has been hired to find a buyer.
The move will dispel fears of a meltdown at Liverpool. The team’s owners, American businessmen Tom Hicks and George Gillett, have been at war over strategy and financing for more than a year. Fans have campaigned to oust the pair, and Benitez has had public disputes with them over spending on players.
The club faces an imminent cash crisis. It has outstanding loans of £237m and its lenders, Royal Bank of Scotland and Wachovia, an American bank, have demanded £100m by July.
Hicks and Gillett have agreed to Broughton’s appointment. A former head of BAT, the tobacco giant, and the British Horseracing Authority, he is chairman of British Airways, where he has been grappling with cabin crew strikes.
Banking sources said last night that Broughton had been given the job of steering through the refinancing, resolving the rift between Hicks and Gillett, and, with Barclays Capital, finding a new owner.
Analysts have suggested that Liverpool is worth £500m but Barclays is understood to believe it would fetch far more if given time to improve its trading.
“Broughton is the kind of international business figure who will be able to bring in the standard of bidders Liverpool should attract,” one source said.
Barclays’ move highlights English football’s troubled finances. Several top clubs are struggling under the burden of high player wages and crippling debts. Portsmouth became this year the first Premier League club to go into administration.
Fans have rebelled against foreign owners who bought in at the height of the football boom. Manchester United supporters want to oust the Glazer family, the American investors who bought the club in 2005. Wealthy City financiers have formed a consortium, the Red Knights, to buy out the Glazers.
Hicks and Gillett bought Liverpool in 2007 from the Moores family for £219m. The family sold up because they hoped to secure backing to build a new stadium that would allow Liverpool to compete with on better terms with United.
The scheme has been dogged with delays, however, with Hicks and Gillett blaming the banking crisis for their inability to finance construction.
The club has been talking to potential investors for several months including an American private equity fund, Rhone Group. It offered to buy a 40% stake in the club for £116m.
Hicks and Gillett’s dealings with senior Liverpool executives have proved difficult.
Rick Parry, who had been chief executive of the club for 12 years, quit last June after a deterioration in his relationship with Hicks.
Logged
