The parent company of Liverpool suffered a substantial £42.6 million loss last year, due in large part to the interest payments being paid on the debt accrued by Tom Hicks and George Gillett in order to buy the club.
Annual accounts released on Thursday saw Liverpool’s accountants issue a warning that uncertainty surrounding the refinancing of the £350m debt "may cast significant doubt on the group's and parent company's ability to continue as a going concern". There is a July 24 deadline which has to be met for the restructuring of the owed sum.
American duo Hicks and Gillett, who acquired the club in February 2007, say they are confident of securing a refinance deal.
However, the financial profit of the football club - £10.2m for the year ending July 2008 – is being negated by the cost of servicing the parent company’s loans.
That parent company, Kop Football (Holdings) Ltd, made a loss of £42.6m, constituted largely by interest payments of £36..5m, leading the club’s accountants KPMG LLP to make the following statement:
"The group has credit facilities amounting to £350m which expire on 24 July 2009. The directors have initiated negotiations to secure the replacement finance required by the group and these negotiations are ongoing.
"These conditions... indicate the existence of a material uncertainty which may cast significant doubt on the group's and parent company's ability to continue as a going concern."