Some more hope - Tony B
Kenny Huang has broken his silence on his attempt to buy Liverpool, whose present owners, George Gillett Jr and Tom Hicks, are set to be ordered to foot a bill for penalty fees that could exceed £45 million.
Prospective bidders for the club were assured by the Royal Bank of Scotland (RBS) that Hicks and Gillett will, in the event of a sale being completed, be told to pay any punitive charges arising from their latest refinancing deal, or risk being sued.
Huang, meanwhile, confirmed last week’s revelations in The Times that he is leading a consortium to buy the club. In an interview with Sohu Sports, a Chinese website, Huang claimed that his proposal has been well received by the Liverpool board and, although he has yet to submit a formal bid for the club, he remains hopeful of beating off rival bidders and completing a deal.
The already multilayered situation regarding the potential sale of the club has been made more complex by the disclosure of details pertaining to the refinancing deal secured by Hicks and Gillett in April, which expires in October. According to the terms of the agreement with RBS, the Americans are personally liable for penalty fees in the region of £2.5 million for every week that passes without the club being sold.
By the end of this month, that sum will stand at £45 million and the fees will continue to build until the club are sold. The bank imposed the fees on Kop Holdings, Liverpool’s parent company, in an attempt to hasten the exit of the Americans exit after a deal to sell part of the club to Rhône Capital, the private equity firm, collapsed this year.
RBS will take the fees out of the proceeds of the club’s sale, but if Liverpool are sold for less than £282.4 million — the club’s £237 million debt plus the potential penalty fee — the bank will pursue Hicks and Gillett, not Liverpool, for the extra money.
RBS moved to allay fears that the new owners would be saddled with the bill, although the likelihood is that Hicks and Gillett will factor the costs into their asking price.
“We have confirmed with Liverpool’s board that we are interested in bidding for the team,” Huang said of his proposal, which The Times understands is backed by China Investment Corporation, the investment arm of the Chinese Government. However, the Hong Kong-based businessman was not prepared to reveal who his backers are besides verifying the involvement of Yang Guang as fund manager for the consortium.
“We have signed a confidentiality clause with regards to the acquisition of Liverpool,” Huang said. “We are doing all aspects of the investigation and assessment, and [the] overall progress is very smooth. However, we have powerful competitors, so now there are many unknowns.
“There are rivals from North America and the Middle East. Each bidder wants to consider themselves at an advantage, so it is difficult to say we are far ahead. We will continue to work with the board and the banks of Liverpool, as well as other aspects.
We have provided a large number of documents and now we have got an answer. Liverpool’s board has approved our proposal and I hope we continue to move forward. We will have an answer in less than ten days.
“I am 50 per cent confident we will acquire the club. Our adversaries are stronger and we lack experience, so we need to do further research.”
