PracticeAuditKPMG issues going concern warning on Liverpool FC

KPMG issues going concern warning on Liverpool FC

Football club's parent company suffered a £42.6m loss last year

Liverpool FC’s parent company has been warned about it ability to trade as a
going concern by its auditors KPMG, and told it needs to refinance its £350m
debt before 24 July.

KPMG issued a going concern statement in its audit of the Kop Football
Holdings which owns the club.

Co-owners George Gillett and Tom Hicks are negotiating a refinancing deal
with Bank of Scotland. Another option could be equity financing.

‘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,’ said the
statement.

‘These conditions, along with other matters explained in note 1 to the
financial statements, 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 warning came with the news that Kop Football Holdings suffered a £42.6m
loss last year. But Liverpool itself produced a record turnover of £159.1m for
the year ending July 2008 and a net profit of £10.2m.

The holding company is in the red due to interest payments on the debt it
amassed in order to buy the club in February 2007. Interest payments accounted
for £36.5m of its losses.

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