Tom Hicks defaults on some loans
Written By: isps|
Apr 5, 2009
from the Guardian:
Tom Hicks’s US sports investment-vehicle has defaulted on loans amounting to US$525m (£354m). The news emerges less than four months before he and his Liverpool co-owner, George Gillett, must refinance a £350.5m loan for the Premier League club with two separate banks.
The Hicks Sports Group (HSG) has missed monthly interest payments on three separate loans, one of US$350m, another of US$100m and a third of US$75m. Hicks has sought to reassure the media in Texas that his search for investors in his US baseball and ice hockey franchises, the Texas Rangers and Dallas Stars, would succeed to the satisfaction of his lenders, of whom there are 40.
Hicks’s investment in Liverpool is held through a separate entity, Kop Investment LLC, which is the parent of the UK-based Kop Holdings, Liverpool’s sole shareholder. However there is likely to be an impact on Hicks’s interests at Anfield since he is also engaged in an odyssey to attract investors to the club. So far Hicks’s attempts to woo backing from the Middle East has faltered; the news is therefore particularly untimely.
It will also have the damaging effect of shaking the confidence of Kop Holdings’ two lenders, Royal Bank of Scotland, around 70% owned by the UK government, and the US finance house Wachovia. The club’s £350.5m loan is not only secured against its own assets but also through letters of credit and personal guarantees from Hicks and Gillett, amounting to £185m.
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