Accountants warn over Liverpool debt

Accountants have voiced concern over the short-term viability of Liverpool’s parent company as the club’s American owners, Tom Hicks and George Gillett, attempt to refinance 350 million pounds of debt.

Annual accounts for Kop Football (holdings) Ltd., which were published on Thursday, showed that the parent company made losses of 42.6 million pounds in the year to July 2008, largely due to interest payments on the debt that was incurred to enable Hicks and Gillett to buy the club.

The club’s accountants, KPMG, issued their warning in a note attached to the accounts.

It said: “The group has credit facilities amounting to 350 million pounds which expire on 24 July 2009. 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.”

Hicks and Gillett have assured supporters that they will be able to refinance the debts but the warning from the accountants will inevitably increase hostility from fans who have been angered by the way in which the Americans financed their takeover.

The owners last year put plans to construct a new 60,000-seat stadium close to the club’s current home at Anfield on hold because of financing constraints arising from the club’s debt level and the credit crunch.

Liverpool’s underlying financial performance remains healthy with the football club having registered record turnover of 159.1 million pounds, up from 133.9 million the year before, and profit of 10.2 million.