VSI
Dallmeier

Business Directory

Browse the Directory

Sign Up to the Directory

Levy
FC Business Twitter
FC business Linked in
FC Business facebook
FC Business Youtube

Man Utd bond issue complete

Fri 22nd Jan 2010 | Money & Finance

A formal announcement is due to be made when the New York Stock Exchange opens this morning that the bond issue to raise the £500 million investment has been completed helping to get Manchester United’s spiralling debts under control.

It’s reported in The Times newspaper that more than 50 low-risk investors, primarily insurers and pension-fund providers, have stumped up the cash at a fixed annual interest rate of 9 per cent, The Times understands. The interest must be paid quarterly.

The news comes after a United delegation embarked on a week-long series of “road shows” across three continents, sporting a “warts and all” 322-page prospectus in a desperate bid to woo investors.

According to the latest accounts for the year ended June 2009, United owed £509 million to international banks.

The money raised through bonds will be used to pay back that debt, secured against the club. But while the annual interest bill will remain largely unaffected, United — crucially — will be freed of the strict financial conditions imposed by lenders that would have made life extremely difficult for the Barclays Premier League champions if they were less successful on the pitch.

United will face an annual interest bill of £45 million on the bonds, similar to the £41.2 million paid in the last financial year, but unlike the debt at present secured against the club, the bonds do not mature until 2017.

That is also when the payment in kind (PIK) notes, debt for which the Glazers are personally responsible and which takes the total borrowing to £716.5 million, are due to be repaid.

However, the news comes after it was revealed that despite United's debt ravaging their financial situation, total salary costs at Old Trafford have been steadily rising.

In 2008, salary costs of £121m were shared between 68 players and 476 ancillary staff. The number of other staff rose before June 2009 but the loss of six players from the total meant the £123m total salary costs implied an average wage rise of more than 10% per player.

This season it looks like rising still further, with the total salary bill from the three months to September last year up by almost another 10% from the same period the previous season.

It’s not all dome and gloom however, United have also announced another lucrative sponsorship deal with Turkish Airlines (THY) in a 3½-year sponsorship deal which will replace Air Asia as the team’s official carrier. They have also finalised a deal with the African Telecoms provider Globacom worth £5m in a five year deal.

Add to: Google Google | Yahoo Yahoo | Live Live | del.icio.us del.icio | Digg Digg |

Related Articles

Chancellor Misses Rate-Relief Open Goal In Budget

Thu 9th Mar 2017 | Money & Finance

Rate relief for football in the community: An open goal for Government in 2017 Football clubs, large and small, will not benefit from any substantive ‘give-aways’ following the Chancellors...

Leicester City make pre-tax profit of 16.4m after winning Premier League

Thu 2nd Mar 2017 | Money & Finance

Leicester City today announced its financial results for the year ending 31 May, 2016 – a period of continued growth and unprecedented success for the Football Club. An historic, captivating...

Liverpool FC announces financial results for year to May 2016

Wed 1st Mar 2017 | Money & Finance

Liverpool FC has filed its annual accounts for the year to May 31, 2016 reporting that revenues are continuing to grow, creating further financial stability for the club. Overall revenue increased to...

Wolverhampton Wanderers Post 5m Profit

Tue 28th Feb 2017 | Money & Finance

Wolverhampton Wanderers have posted a profit of over £5m in their latest accounts. The club’s headline financial information shows a pre-tax profit of £5.831m for the year ending 31...