With their loan refinance date just around the corner, Liverpool owners Tom Hicks and George Gillett are now facing news of a GBP 42.6 million loss on behalf of parent company Kop Rugby (Holdings) Limited.
Although Liverpool appears to be doing well, the co-owners’ future at the club remains in jeopardy as a result of their current financial status, as noted by The Guardian. The club managed to secure a GBP 10.2 profit and GBP 159.1 million in record-breaking turnover for the July 2008 year-end, while Hicks and Gillett struggle to obtain refinancing for their GBP 350 million in loans.
The dismal outlook for Kop Rugby (Holdings) Limited was revealed by Liverpool accountants at KPMG LLP, noting that the figures ‘may cast significant doubt on the group’s and parent company’s ability to continue as a going concern’.
Consequently, Hicks appears to be taking the news with a grain of salt and remains confident about the pair’s ability to renegotiate their financing terms next month, as indicated by an unnamed source.
The loss at Kop Rugby has been attributed primarily to interest that accumulated since Hicks and Gillett assumed control of Liverpool in 2007.
The co-owners recently met with members of the Royal Bank of Scotland (RBS) to explore the possibility of a six-month extension, which would bring the deadline through to early 2010. It is believed that Hicks and Gillett may very well secure a refinancing deal through RBS, based on their ability to provide personal guarantees. To help build collateral, the two are now attempting to unload some of their American assets as a way of reassuring the banks.
Hicks has been battling his own share of turmoil, following word that his company, Hicks Sports Group, was behind by US 10 million quarterly interest payment earlier this year.