Tom Hicks aims to refinance debts in an effort to remain in control at Liverpool

Liverpool co-owner Tom Hicks is attempting to refinance the club’s debts of £237 million with Royal Bank of Scotland in an effort to remain in control at Anfield, Telegraph Sport can disclose.

Tom Hicks aims to refinance debts in an effort to remain in control at Liverpool
Deeper in the red: Tom Hicks is considering raising fresh finance to buy out the RBS debt Credit: Photo: AP

Hicks met with Liverpool chairman Martin Broughton in London on Wednesday and is understood to have told him that raising fresh finance to buy out the RBS debt is one of a number of options he is considering ahead of the Oct 6 refinancing deadline set by the bank.

Hicks’s discussions with Broughton took place with co-owner George Gillett in talks with an American lender intended to protect his 50 per cent stake in the club, which could be vulnerable if he fails to renegotiate a $75 million loan secured against the shares in 2008.

Gillett secured the loan from funders Mill Financial in 2008 to help him meet personal guarantees demanded by RBS in a previous round of refinancing, putting up his shares in the club as collateral.

Mill Financial called in the loan this summer and Gillett could technically be in default if he takes no action in the short-term, but sources with knowledge of the situation said on Thursday night that he was in talks to extend the loan and remains in control of his shares. He is also understood to be working closely with Hicks on the refinancing options that would allow them both to remain in control.

While Hicks is not thought to have met with RBS during his UK visit the bank is considering extending its financing to the American’s in order to provide Broughton with more time to secure a buyer for the club.

Bank sources have told Telegraph Sport that taking control at Anfield is their least-favoured option, and that they will consider extending the current financing arrangement if required.

Were Hicks to be successful in raising the money to buy out RBS, Broughton and his colleagues on the club board would have to decide whether to attempt to block the deal.

Broughton, managing director Christian Purslow and commercial director Ian Ayre blocked the American’s last attempt to refinance in June. They did so only having taken legal advice from Slaughter & May that they were able to do so.

Company law requires directors to act in the best interests of the shareholders - in this case Hicks and Gillett - but in some circumstances they can over-ride those concerns if it is deemed to be in the company’s interests.

If Hicks returns with a refinancing deal before Oct 6 they will face the same choice. Broughton is understood to have told Hicks on Wednesday that the board remain open-minded and will listen to any proposal he places before it.

Broughton, who was appointed in April as a condition of RBS extending the financing to the Americans for six months, has made it clear that he considers the sale of the club to an owner who removes the club’s debt and allows investment in a new stadium to be the best deal for Liverpool’s future.

The absence of any buyers willing to meet Hicks’ and Gillett’s valuation has placed RBS in a deeply uncomfortable position, and despite pressure from supporters there appears to be little appetite within the bank to force the American’s into default.

While RBS has moved the loans to its “bad bank”, the global restructuring group, Hicks has consistently maintained that Liverpool is a growing and increasingly profitable company rather than a distressed asset.

His pursuit of a potential refinancing deal indicates his determination to remain involved and recognise value from the club.