Page last updated at 09:29 GMT, Tuesday, 23 June 2009 10:29 UK

Liverpool close to bank debt deal

Liverpool owners George Gillett (left) and Tom Hicks
The club's owners are having to sell assets in the US and Canada

Liverpool Football Club - which owes two banks £350m - is close to renegotiating its debt with the Royal Bank of Scotland, the BBC has learnt.

RBS has told club owners Tom Hicks and George Gillett the debt, due to be repaid in July, will be refinanced.

BBC business editor Robert Peston says RBS will insist on significant payments in the subsequent six months.

It comes as Portsmouth's defender Glen Johnson has agreed to join Liverpool in a £17.5m move.

Lending agreement

Our business editor says the good news for Liverpool FC supporters is that the club is not about to go bust.

The club borrowed too much; and it now has to tighten its belt, pay down debt and endeavour to live within its means
Robert Peston, BBC business editor

"I understand that Royal Bank of Scotland has told its two billionaire owners, George Gillett and Tom Hicks, that their £350m debt - which falls due for repayment on 24 July and is owed to Royal Bank and Wachovia of the US - will be refinanced.

"A new lending agreement will be put on place."

A spokesman for the US pair would not comment on the development.

The other bank owed money, Wachovia, has yet to make any announcement.

US sales

Latest accounts show Kop Holdings, the parent company of the Anfield club, lost £42.6m in the year to August 2008.

The RBS revelation comes days after Liverpool co-owner George Gillett agreed to sell one of his major assets in a deal which would ease financial pressures at the Premier League club.

He is selling his 80% stake in the NHL's Montreal Canadiens ice hockey team, in a deal reported to be worth at least $550m (£332.9m).

His fellow Liverpool owner, Mr Hicks, has also been looking to sell off elements of his own sporting empire - which includes Major League Baseball's Texas Rangers and the NHL's Dallas Stars.

The sales will help provide financial guarantees to RBS and Wachovia that Mr Gillett and Mr Hicks have funds available for the operation of the football business.

'Commercial acumen'

Meanwhile, the club has appointed a new managing director, Christian Purslow, as overall manager of the club until a new chief executive is in place.

Mr Purslow will represent owners George Gillett and Tom Hicks and liaise with manager Rafael Benitez on his summer transfer dealings.

He is an executive board member and co-founder of private equity firm Mid Ocean Partners.

"His strategic and commercial acumen will be a real asset and we're delighted that he has made a long term commitment to the club," Mr Gillett said.



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RELATED INTERNET LINKS
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FROM OTHER NEWS SITES
Times Online Gillett to sell Canadiens to help Liverpool - 9 hrs ago
Sky Sports Reds boss poised for funding boost - 22 hrs ago
Sky News Liverpool Closes In On Debt Deal - 38 hrs ago
Ananova Liverpool Close To Scoring RBS Debt Deal - 42 hrs ago
Mail Online UK You can bank on Liverpool: RBS confirm refinance deal as fears of Anfield bust evaporate - 43 hrs ago



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