Liverpool's Fernado Torres and Steven Gerrard
Aug. 2 – Kenny Huang, the chief executive of Chinese sports investment company QSL, is in negotiations to buy Liverpool Football Club in a takeover bid that would place the club under Chinese ownership.
The bid, which has been lodged with the backing of mainland investors to the Royal Bank of Scotland, Liverpool FC’s main creditors, would leave the current owners, Tom Hicks and George Gillett, without profit on their original investment.
Hicks and Gillett are looking for £600 million, however, following a refinancing deal put in place earlier this year, RBS is able to take control of the sale if it feels it will offer the best chance of repaying its loan.
According to published reports on ESPN, Huang has apparently made a direct offer to repay the £237 million debt. Hicks and Gillett may be powerless to prevent a possible takeover as RBS, who have the right to order them to sell the club, agreed an extension of their £237 million debt facility three months ago.
Huang has a track record in international sports deals, having set up several financing projects between Chinese and American companies in the past, partnering large state-owned enterprises in deals to make profits off the back of the economic boom in China.
Liverpool is one of England’s leading Premiership clubs, although they suffered in the league last season finishing seventh and missing out on lucrative European club competitions by failing to qualify.
This is a daft idea. Overseas buyers of British football teams are normally the province of Russian oligarchs who want a place to park the money that they ripped-off from the Russian people or former Thai Prime Ministers on the run. The Russians have a history of football, the Chinese can’t even hold an honest local men’s game (although the women’s team does well internationally). The hey-day of British football is long gone. Liverpool is currently in debt. I presume the gentleman concerned has done his sums on what sports clothing and gear he can expect to sell for the high price he’ll be paying for a once great team. Unless Liverpool F.C. includes a dedicated following outside Britain who will buy the team’s merchandise, I can’t see how it will pay (and that is before taking into account that local Liverpudlians may be put off by the team being owned by a Chinese or pirated merchandise affecting sales).
It seems as if its going ahead. Huang is backed by the mainlands China Investment Fund (CIF) and they’ve just sold USD558million worth of shares in Morgan Stanley they own. That’s a sum exactly equivilant to Liverpool’s debt. Seems like some fund raising going on to make this deal happen. – Chris
More updates on this on-going story here over at China Briefing: http://www.china-briefing.com/news/2010/08/05/china%E2%80%99s-liverpool-fc-purchase-good-news-for-shanghai.html – Chris