Bank confident of Liverpool's financial health

Jun 26, 2009 - 3:07 PM By ROB HARRIS AP Sports Writer

LONDON(AP) -- The Royal Bank of Scotland reassured Liverpool supporters about the club's financial health, indicating the team owners' loans will be refinanced before next month's payment deadline.

RBS pledged to back Liverpool owners Tom Hicks and George Gillett Jr. in an e-mail to those supporters who have been urging the bank not to extend the $578 million credit facility secured with RBS and Wachovia in the United States.

RBS is Britain's biggest government-controlled bank as a result of an industry bailout last year. Some fans' groups had hoped because taxpayers had effectively bailed out RBS, they could persuade the bank to pull the plug on the owners' loans originally refinanced in January 2008, and force them to sell the Premier League club they bought in February 2007.

While RBS spokesman Roger Lowry acknowledged the concerns and "strength of feeling" among fans, he insisted that the bank has confidence in Hicks and Gillett - a positive endorsement ahead of the July 24 refinancing deadline.

"In our view and that of the executive management of the club, it is financially healthy and able to service comfortably its debt obligations from cash flow generated by its playing and commercial activities," Lowry, head of group public affairs at RBS, wrote to fans in an e-mail verified by The Associated Press.

Hicks and Gillett have been shoring up their financial positions in North America.

Hicks is willing to give up control of his Texas Rangers if the right deal comes along, but intends to keep the Dallas Stars. The holding company that owns the teams recently defaulted on about $525 million in loans, though Hicks said that was an intentional move to help his negotiations with banks.

Gillett recently announced he was selling the Montreal Canadiens to the Molson family.

Hicks is still searching for new investors to help fund a 60,000-seat stadium to replace Anfield and is confident of completing a deal by the end of the year.

Hicks and Gillett, who are on the verge of securing an extension on new terms for the facility, insist that the actual debt is not as high as the $576 million often quoted but closer to $411 million.

"The club does not suffer the burden of debt implied by a lot of the recent press reports," Lowry said.

RBS is Liverpool's main banker, handling most aspects of the business, crucially providing credit for transfers. That enabled the Reds to break their transfer record two years ago to sign Fernando Torres for then $40.6 million from Atletico Madrid.

"We have set out to establish a long term relationship with the club, and we look forward to this continuing for many years to come," Lowry said.






No one has shouted yet.
Be the first!