Reds owners agree on new bank deal

European giants Liverpool FC’s owners have concluded a deal to re-finance the loan they took to buy the club in 2007.

While the owners, Tom Hicks and George Gillett are not expected to issue a statement, the agreement will see them paying back £60million of the original debt and an added year.

Negotiations between the Royal Bank of Scotland, Wachovia and the American co-owners continued for months amid the global credit crunch, and it was feared the banks would call in the loan, as both Hicks and Gillett have unsuccessfully sought someone to take a minority stake for around £100m.

However, a source close to the owners has confirmed that a deal was concluded before last weekend’s deadline for re-financing the package.

Hicks and Gillett purchased Liverpool in 2007 for £174m, taking on £44.8m of liabilities, and now, have the original £290m debt reduced to £230m, with £60m being repaid, half immediately

Initially, they had a one-year arrangement, and then negotiated another year with a six-month option.

That option was granted and expired at the weekend but critics, particularly fans’ groups, will see this new agreement as papering over the cracks of a regime that has been unable to advance the club in the face of financial competition from Chelsea, Manchester United, Real Madrid, Barcelona, and now Manchester City.

At the time of the purchase, Hicks and Gillett maintained that financing the debt would not fall on the club but Liverpool now have to find around £40m a year to service the debt, which has enraged fans’ groups and limited manager Rafa Benitez’s transfer budget.

The owners have also failed to finance a new stadium, with preliminary work on the Stanley Park venture halted last season.

In the run-up to the new deal being concluded, Gillett sold his 80% stake in the Montreal Canadians ice hockey club for £350m, while Hicks is trying to offload the Texas Rangers baseball team.

However, ShareLiverpool group re-launched their own takeover plans last week for, in effect, a fans’ co-operative, and believe it would be a more tempting proposal than that just negotiated by Hicks and Gillett.

“The deal we are hearing about for the re-financing of the Americans’ loans is really what we expected,” said the group’s spokesman, Rogan Taylor.

“These are the indications we have had from RBS for a while, I would be interested to know really what Wachovia’s view is. It has been rumoured that they were very unsure about this new deal.

“It is little more than an expensive fix – just sticking plaster and making things more difficult for the club to progress in the long run.

“It is still very short term, year to year, if that. The owners are not able to take the club forward.”

He added: “We produced our own plans again last week, and that is based over a much longer period and aimed at the banks.

“There can be political pressure here. We, the taxpayers, own RBS and maybe they will eventually see that they can get most of their money back with our scheme and it is a much longer-termed plan.”