RBS email to Liverpool FC fans justifying continuing support for American owners
Here is the full email from RBS to Liverpool FC fans justifying the bank's continuing support for American owners Tom Hicks and George Gillett.
----- Original Message -----
From: ~ Public Affairs
To: ~ Public Affairs
Sent: Thursday, June 25, 2009 10:57 AM
Subject: RBS & Liverpool FC
Thank you for your email expressing concern about RBS' banking arrangements with Liverpool FC and it current owners. We are aware of the strength of feeling of a number of fans on this matter and have corresponded with many during the course of the past year or so.
Perhaps I can start by putting RBS relationship with Liverpool FC in context. RBS is the main banker to the Club including all of its operating accounts, cash management, online banking, automated payments, and credit card processing to facilitate ticket sales and retail merchandising. We also provide a credit facility to support the Club's working capital requirements and a letter of credit facility to facilitate the purchase of players from non-Premiership Clubs, along with a loan facility for design, planning and other preparatory work for the proposed new stadium at Stanley Park. We have set out to establish a long term relationship with the Club, and we look forward to this continuing for many years to come.
We also lent money to the Club's parent, Kop Football Limited, so that it could repay debt which was on the balance sheet of the Club at the time of its acquisition by George Gillett and Tom Hicks. This is the only portion of Kop Football's bank debt for which the Club is legally responsible. We took great care when making our original loan in early 2007 and when refinancing it last January to distinguish between obligations of the Club, primarily those outlined above, and obligations of its parent company, the latter being secured by personal guarantees and collateral from the owners and a pledge of the shares they own in the Club. As a result the Club does not suffer the burden of debt implied by a lot of the recent press reports and, in our view and that of the executive management of the Club, it is financially healthy and able to service comfortably its debt obligations from cash flow generated by its playing and commercial activities. It is in our commercial interest to support the Club in the manner described above so that it can continue to perform successfully on and off the pitch.
As far as the Government is concerned, they have been very clear that they do not wish to exercise day to day control over RBS or make commercial decisions for us. Indeed they set up an independent body, UKFI, to oversee the Government's shareholding in RBS, so matters such as strategy and governance can be agreed, while they leave commercially related matters to us.
RBS attaches a great deal of value to being associated with Liverpool FC. I hope my comments reassures you as to the strength and depth of our relationship with the Club and that we will endeavour to contribute to its long term health and success.
Head of Group Public Affairs
Royal Bank of Scotland Group
You'll notice that the bank tries to claim that the loan for Hicks and Gillett has nothing to do with the club.
In one line the banks says that the club is only "legally responsibe" for one part of the loan.
Then in another it states that the other part is "secured by personal guarantees and collateral from the owners and a pledge of the shares they own in the Club. As a result the Club does not suffer the burden of debt..."
In my mind there can be no real distinction made between the debt which the club is "legally responsible for" and one that is merely secured against it by virtue of the fact the owners have put their shares in LFC down as collateral. While on paper it might appear different it is all the same thing.
Let me know what you think...