Liverpool FC are likely to become the first EPL side owned by the state
By Tony Attwood
A Chinese government fund (China Investment Corp) supposedly represented by Kenny Huang has, apparently, being selling off share assets to raise exactly the amount of money that Liverpool Insolvency is in debt to the banks: £351.4m. (That’s not actually the full debt, but it is the debt that RBS and the American bank in league with them want back in any deal involving buying the club).
Does that sound funny? Try this one. A Chinese spokesman for CIC said that it was quite untrue that CIC were interested in buying the Insolvents.
Or this one
“Huang is backed by one of the wealthiest investment funds in the Far East and is well known in China for his interests in baseball and basketball, last year buying a 15% stake in the NBA’s Cleveland Cavaliers. He was first linked with a buy-out at Liverpool two years ago but believes now is the time to make his move.” (The Guardian)
Or this one
The Chinese businessman seeking to to take over Liverpool categorically denied last night that the Chinese state government was financing the bid in any way, though he insisted that he would table between £400m and £450m to secure the club’s future.” (The Independent)
Or this one
“He was previously reported to be buying a stake in the Cleveland Cavaliers basketball team in the United States, but that deal seems to have fallen through.” (The BBC)
Find a story about this guy, and you will find another story denying it. Here’s one: Huang bypassed the owners of the Insolvents and did a deal with RBS. “By going to RBS you can leverage a large amount of pressure that no one else can on the owners,” an ‘insider’ said to the Guardian. “It is a deal which has no interest in shareholders, meaning there will be no profit for Hicks and Gillett.”
Meanwhile Gillett informed RBS that he is in advanced negotiations with the Syrian businessman Yahya Kirdi. Anyway that may just be a misprint for Kolo’s brother.
So maybe it is true, maybe not. I think not because of this: Huang (according to a dozen papers) wants a deal that has to go through in the next week so the manager will have time to buy players… which is nice and cheery for fans of the Liverpool Reds as Tom Hicks called them when he bought them. But it doesn’t say much for due diligence. This is a company whose auditors refused to sign off the last lot of accounts, and whose bankers turfed out their chairman to put in a Chelsea season ticket holder. It is a club in a dire mess, and the thought of doing due diligence in 10 days is semi-skimmed.
Then there’s a private equity gang called The Rhone Group. They were sniffing around in the spring, but didn’t go forward then, but word on the street is…. oh who cares. It is all made up.
Let’s go back to China, where there is a notion that the state’s bankers have just sold exactly the right amount of shares to be able to buy the club. Supposing they do – then what? Liverpool is a selling club, bringing in free transfers and low cost buys, and yet the current manager seems to be holding on to the notion that money will come through. (Oh and do you remember Jamie Redknapp saying on Sky that Liverpool had £35m to spend this summer on transfers?)
So if the Chinese take over, where is the transfer money coming from? All they are looking to do is to wipe out the bank borrowing. At the amount being talked about there is no money for paying off other debts, for buying players, for starting work on the new ground….
Now none of this would be complete without Keith Harris who seems to advise people on selling dead-beat clubs and buying the club that is just about to be “very big, very big indeed”.
He said the Insolvents were worth more than the £350m debt – which is a bit strange since he doesn’t represent Liverpool but represents another buyer. Maybe he knows a man who…
So when we get to a list of six possible bids for Liverpool, and start looking in depth, they seem to start slipping and sliding away. I am not sure there actually are six bids, or five, nor even four, not three, and two of the remaining two look a bit funny.
Of course if the Chinese do buy Liverpool they will have to submit themselves to a fit and proper persons’ test. Which raises a question: is the People’s Republic of China a fit and proper person? I spent a few weeks there a couple of years back, and was amazed and impressed, but I never actually got to ask the President of the Republic one or two questions that were on my mind about his fitness for running a football club.
It is an important point since new all spanky clean and shiny new are now in force. You are supposed to be able to see the beneficial owners on the club’s web site.
Now the Chinese have a reputation for being inscrutable, so maybe they are already working in preparation for the moment they have to declare themselves owners. If so, their trial run comes with the Leeds United web site which says…
“LUFC is a wholly owned subsidiary of Leeds City Holdings Limited (‘LCH’).
“LCH has five shareholders, four of these hold 27.15% collectively with no one of these holding more than 10% of the issued shares.
“FSF Limited (a company incorporated in Nevis) holds 102,000,000 or 72.85% of the issued shares.
“Chateau Fiduciaire SA (‘the trustee’) is the legal owner of the shares in FSF Limited. The trustee is a fully regulated Swiss Fiduciary providing professional trust and corporate services to clients worldwide.
“FSF Limited has 10,000 shares that are held on behalf of 3 separate and independent discretionary trusts (‘the trusts’). Two of the trusts hold 3,333 shares each and the other holds 3,334. The trustee is the duly appointed trustee of the trusts and manages them independently. The class of beneficiaries in each trust are entirely discretionary, they are not identical and can only be identified by the potential nature of any benefit.
“FSF Limited was incorporated purely for the purpose of the trusts’ investments in LCH. These are not the trusts’ only interests. The trusts have no other interest in any football club.”
OK that’s clear then. It wasn’t Ken Bates after all. And good to know that the Fit and Proper Person’s Test means something in Gibberish, because it sure don’t mean nothing in English. Good tough fighting work from the football league there, properly arranged to give us poor fans a clue as to what is going on.
So if RBS decides to turn down Huang’s proposal, or if it turns out he runs a rather nice little restaurant in Market Harborough and not a basketball team after all, RBS still it has the option of calling in the loan in October. It would then be classed as “distressed debt” and that, as they say, would be more or less that.
Kop Football (Holdings) would be directly owned by RBS and run as a part of the bank which is itself owned by taxpayers in the UK. In other words it would be nationalised just as RBS is. With the owners not able to provide any more guarantees they would be thrown off the board. The bank would then deal with the matter directly.
That means that citizens of the United Kingdom of Great Britain and Northern Ireland will own the club. We will all have to be vetted as fit and proper persons – and I am rather worried about the bloke at the end of our street.
Still, a bit of power could be fun, and I shall be there exercising my rights to have an opinion over a football club I partly own.
Fancy buying an apartment on some land just close to Everton’s ground, anyone?