Goldman Sachs off Liverpool debt deal -sources
Wed Aug 29, 2007 7:02 PM BST146
By Elena Moya
LONDON, Aug 29 (Reuters) - U.S. investment bank Goldman Sachs (GS.N: Quote, Profile , Research) is no longer working for Liverpool F.C. to refinance the debt used to buy the soccer club earlier this year, people familiar with the situation said on Wednesday.
Following the March acquisition by U.S. tycoons Tom Hicks and George Gillett, bankers at Goldman Sachs's New York office drew up a highly geared refinancing plan that would have put about 550 million pounds ($1.1 billion) of debt onto the club's books, more than 20 times its profit, one of the sources said.
Liverpool is now focusing on either extending or refinancing a 300 million pound bridge facility, which expires in February. A new adviser may be appointed, the source added.
"Goldman is no longer involved in refinancing Liverpool," a second source said.
Both sources spoke on condition of anonymity.
Goldman Sachs declined to comment, while Liverpool F.C. were not immediately reachable for comment.
Investors are shying away from highly leveraged deals following the recent turmoil in credit markets, making it more difficult for companies to access financing.
Liverpool arch-rival Manchester United [MNU.UL] also failed this summer to refinance its high-priced debt, following the acquisition of the club by U.S. billionaire Malcolm Glazer.
Unlike Glazer, the refinancing plan for the Liverpool takeover did not include a direct equity investment by the new owners, but was instead slated to be funded only with new debt, the first source said.
The plan was to raise about 300 million pounds to re-pay the bridge facility provided by Royal Bank of Scotland (RBS.L: Quote, Profile , Research), as well as another 250 million pounds to finance the building of a new stadium, the source added.
The stadium, originally expected to cost about 280 million pounds, may now end up costing as much as 400 million pounds, the source said.
The Goldman Sachs plan included raising as much as 8 million pounds for naming rights on a new stadium, the source said, while London rival Arsenal generates about 3 million for its Emirates Stadium.
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