The parent company of Liverpool FC, owned by Tom Hicks and George Gillett, lost £42.6m in the year to August 2008.
The loss was mainly caused by the £36m of interest payments that Kop Football Holdings had to make to service the debt taken on to buy the club.
In the annual accounts released on Thursday night, Liverpool’s accountants have also warned that remaining uncertainty over refinancing the £350million debt before the 24th July deadline ‘may cast significant doubt on the group’s and parent company’s ability to continue as a going concern’.
Although Hicks and Gillett say they are confident of refinancing their debt, the figures reveal that the financial success of the football club is being swallowed up by the cost of servicing the parent company’s loans.
The accounts for the year ending July 2008 showed Liverpool made a £10.2million profit but the parent company Kop Football (Holdings) Ltd made a loss of £42.6million, mainly due to interest payments totalling £36.5million.
The accountants, KPMG LLP, said: “The group has credit facilities amounting to £350million 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.”
The club’s turnover was a record £159.1million compared to £133.9million the year before, with a profit of £10.2million.
The results for the parent company showed net debt on 31 July 2008 of £300m.
The owners last year put plans to construct a new 60,000-seat stadium close to the club’s current home at Anfield on hold because of financing constraints arising from the club’s debt level and the credit crunch.
For more fascinating features, subscribe and save 30% and use the below link?
