Liverpool owners Tom Hicks and George Gillett need to seemingly get their act together on finding new investment for the Anfield club as Liverpool aim to grind out fourth spot this season.

Liverpool are moving towards a very ominous looking cliff financially as Chief Executive Christian Purslow's admitted to the clubs supporter union at the beginning of February. Purslow’s claimed that Liverpool must reduce their debt significantly with a cash injection to the two banks (RBS and Wachovia) covering the American owner’s loans within the next six months, otherwise they would not be able to refinance their debt with RBS and Wachovia.

Purslow said in the meeting with the Spirit of Shankly group ‘One of our key priorities is to reduce the debt by £100 million. This is a requirement from our bankers and will allow us to look at more flexible and longer-term refinancing when this investment is brought in. The targeted reduction was agreed by the bank, myself and the owners when I was brought in.’

Reports at the beginning of the season claimed that Saudi Prince Faisal bin Fahad bin Abdulla was in talks with the Liverpool owners about a 50% stake in the club, taking 25% off each owner. Yet failed to come to fruit as the talks were primarily over sponsorship rights of Liverpool youth academies in Saudi Arabia and Gillett’s NASCAR interests. It appears Liverpool is now seeking the £100 million cash injection through the dilution of shares.

Christian Purslow at the same meeting said ‘The £100 million will be made by the issuance of new shares, and will not go towards anything else other than paying down the debt, reducing it to £137 million. This new investment will also mean a dilution of the current ownership.’

What is becoming clear is that at least Tom Hicks and George Gillett have finally taken the step in admitting they can’t do this alone. The need for investment is clear in order to service the debt from the banks and keep the club running day to day. This all seems a long way off from the new stadium promises made upon their purchase of the club. Liverpool have made it clear they expect the banks will allow them to refinance the debt to be more flexible and over a longer period of time, but this is having an adverse effect on the team.

Rafa Benitez’s transfer budget has taken a massive hit and looks likely to continue during the summer. The prospect of Steven Gerrard and Fernando Torres considering leave the club due to the lack of investment is a real worry. Reported in the newspapers this weekend was Manchester City’s preparations for a massive £140 million bid for the pair. Clearly that is very unlikely to happen but it could turn the American owner’s heads if such an offer came in. I find it hard to believe Gerrard would even consider such a move but he may be forced out of the door if it safeguards the well being of Liverpool football club.

The prospect of a new investor taking 25% off Tom Hicks and George Gillett each would be the dream for Liverpool, a balancing of the books and a kick start for the new stadium may well be the making of the club long term. The share dilution prospect to which Chief Executive Christian Purslow has suggested will solve the problem, but it’s a stop gap. A short term measure to alleviate the banks growing concern over lending to Liverpool and servicing its debt. The long term profit is there for the owners but not at the full ownership they wanted. They’re going to have to give up some of the pie to have any at all.

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