After a disappointing season and what has been a turbulent transfer window in the summer, things are getting interesting at Anfield road, Liverpool.
Kenny Huang has been reportedly linked with taking over Liverpool F.C for an alleged £350m. Huang is the head of Hong Kong-based investment company QSL Sports, which are claimed to be backed by one of the biggest sovereign wealth funds in east Asia. Apparently, they do not value Liverpool more than its debt, which means that at the current valuation, the share holders walk out empty handed! Liverpool F.C currently owes around £237 million to RBS in principal and around £100 million in the form of interests and overdrafts. Huang reportedly made a proposal to RBS, offering to clear all debts on the club in return for full control at Anfield , discounting any equity value that the club holds. However, for the deal to go through, the Liverpool board – represented by Chairman Martin Broughton, managing director Christian Purslow and commercial director Ian Ayre, along with Tom Hicks and George Gillett – has to approve the proposal with a majority.
What is interesting here is the fact that the Hong Kong Mogul has chosen to go public with his interests in Liverpool F.C. Ideally, the deal could have been sealed behind closed doors, but its pretty much clear that after getting a nod from RBS , Huang is trying to corner the Americans by gathering fan support through the media buzz. Sources close to the suitors also claimed that Huang is dead serious about building the new stadium, and wants to conclude the deal before the end of transfer window, so that he could bring in reinforcements as good as Lionel Messi.
Tom Hicks and George Gillett took over the club in Febuary 2007 for a reported £218 million, and further invested another £144 million; a major part of this deal was financed by debts. If Huang has his way, the Americans, who value the club at £600 million, could walk out without a penny. They would most definitely want the valuation to go up, which explains why a Syrian businessman, Yahya Kirdi, emerged as a possible buyer after Huang made his interests known.
Catch-22
Gillett and Hicks understand that they do not have the financial muscle to drive the club forward. They cannot reinforce star players into the squad, the only way to win trophies, and prevent the valuation from going down. The whole of Europe is under financial turmoil, and there are not many people knocking at their door. It is indeed possible that in case they duck the Chinese offer, there may not be any buyers meeting their valuation. This could actually put the club into distress and cause losses, leave alone profit. Kenny Huang could not have done better in forcing the Americans to sell. He already has approval from RBS, while the fans are cautiously evaluating his promises. English clubs are still a value proposition, given that the promoters could sustain an eight figure annual loss for the next five years. Huang has the financial backing and if he could prove that in front of the F.A , he could be the sugar daddy Liverpool require !
