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Alarm bells sounding for Everton

Everton
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Liverpool chase £100m investment before summer

Liverpool require a £100 million cash injection before the summer or owners Tom Hicks and George Gillett will face a decision over whether to sell the club when the current debt-refinancing agreement ends in July.

Minutes from a meeting between Liverpool managing director Christian Purslow and supporters' group 'Spirit of Shankly' last month, released on the group's website, suggest that the Royal Bank of Scotland (RBS) and Wachovia - the banks with whom Liverpool currently have a refinancing deal - are putting pressure on the club to find £100 million of new investment to help better manage their reported £237 million of debt.

The current refinancing deal with RBS and Wachovia runs out in July and if Liverpool don't meet the £100 million investment figure then it's thought Gillett and Hicks will either have to seek an agreement with a new bank, or put the club up for sale.

Purslow admitted at the meeting that, though a cash injection was a requirement laid down by the banks, no promises had been made and there was no guarantee that investment will be found in time.

"One of our key priorities is to reduce the debt by £100 million," he said. "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 [as managing director].

"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."

Purslow also revealed that after beginning the search for new investors last year, the number of potential investors has reduced from "25-30" to "five or six" with whom the club are currently in discussions.

"There are no promises [that investment can be secured in July], just an expectation and hope that it can be done in that time," Purslow said. "I cannot guarantee it.

"There had been around 25-30 investors interested, although some were clearly not seriously interested once we had spoken with them. There are now around five or six potential investors with whom we are talking.

"You should rest assured any investor in this economic environment will spend plenty of time understanding Liverpool before committing. I would rather get it right than rush, and our banks and owners agree."

• Two versions of the minutes

There are two versions of the minutes on the 'Spirit of Shankly' official website - one agreed by Purslow and one that includes statements that Purslow denies making - with the supposedly 'un-edited' version containing suggestions by Purslow that Hicks and Gillett could no longer "hang on" to the club because of the banks' "unhappiness" at their ownership and disturbing news for Liverpool fans that there is "no Plan B".

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