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United ownership thread
Topic Started: Nov 15 2010, 11:42 PM (1,583 Views)
Monty
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Manchester United’s owners agreed to pay off a payment-in-kind loan worth about 220 million pounds ($353 million), according to a corporate filing by the English soccer club.

Red Football Joint Venture Ltd. will “prepay 100 percent from the outstanding loan on Nov. 22,” the team’s parent company said. The document, called a voluntary free-payment notice, was signed Joel Glazer, co-chairman of Red Football, and was sent to the holders of the loan. Philip Townsend, a spokesman for Manchester United, declined to comment.

The Glazer family, which also runs the National Football League’s Tampa Bay Buccaneers, bought the 18-time English soccer champion in 2005. United supporters have protested against owners because of the debt they’ve added to the team. The Glazers were shouldering 16.25 percent annual interest charges on the PIK debt because of concern they’d face fans’ anger if they used the soccer club’s cash to pay off the loans.

The Glazers aren’t going to take any money out of the club to pay down the debt. With PIK loans, interest rolls up annually and increases the amount owed.

The Glazers bought the 18-time English champion for 790 million pounds. In January, they converted a bank loan secured against the team into a 526 million-pound bond. Under the bond’s terms, the Glazers could make a one-time withdrawal of 70 million pounds from the club to pay down the PIK loan.

Anti-Glazer protests increased after details of how the owners were financing the once debt-free club were revealed in the bond prospectus. Thousands of supporters took to wearing the green and gold colors of the team’s original incarnation, and a group led by Jim O’Neill, chairman of Goldman Sachs Asset Management, emerged as a potential buyer.

16.25 Percent Interest

The PIK loan issued in August 2006 to Red Football Joint Venture is held by fewer than 10 investors, mainly hedge funds. The facility started out as a 138 million-pound loan, accruing annual interest of 14.25 percent. That rose to 16.25 percent after the club breached a debt-to-earnings ratio agreement. The Glazers bought back between 15 and 20 percent of the loan in 2008.

The PIK loan to United was due to mature in 2017. If the Glazers had held the debt until then, they would have owed almost 600 million pounds at the current interest rate, according to Bloomberg calculations.

On Oct. 8, the team announced a record loss of 83.6 million pounds for the year ending June 30. Much of that was attributable to interest payments and costs related to replacing long-term bank debt with the bond. Sales reached a record 286 million pounds.

Since the Glazers’ purchase, United has won three domestic league titles and took the Champions League in 2008.

The club has increased revenue from various sources since the takeover, notably in commercial operations. A London-based sales team has negotiated sponsorship and partnership deals in industry sectors across the world.

United is currently third in the Premier League, three points behind leader Chelsea and one behind Arsenal.


Great news :clap:
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Jeffers
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I read that as UK pay off PIK debt :lol:

Its great news, just in time for the financial fairplay.

What's the KFC united in financial problems?? Going the way of Liverpool, I think you have been talking out of your arse :p
"I don't play against a particular team. I play against the idea of losing." - Cantona
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The Derry Pele
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Jeffers
Nov 15 2010, 11:51 PM

What's the KFC united in financial problems?? Going the way of Liverpool, I think you have been talking out of your arse :p
200 million payed off from 1 billion and everything is alright :lol: some people :lol:
F**k Damien Duff
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Jeffers
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Frank Grimes
Nov 15 2010, 11:54 PM
Jeffers
Nov 15 2010, 11:51 PM

What's the KFC united in financial problems?? Going the way of Liverpool, I think you have been talking out of your arse :p
200 million payed off from 1 billion and everything is alright :lol: some people :lol:
so we miraculously make £200m from nowhere? that's almost enough to buy Liverpool :lol:

you will also find the club doesn't have a billion pounds of debt. some people :lol:

"I don't play against a particular team. I play against the idea of losing." - Cantona
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TheReturnOfTheKing
Definitely NOT a Terrorist
better question, where are they getting the money from?

lol i would bet they will take out another loan to pay it off
no
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Monty
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It could be another loan (which would be a lower interest rate than the PIK anyway) or maybe they sold something.
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TheReturnOfTheKing
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NAN17
Nov 16 2010, 12:02 AM
It could be another loan (which would be a lower interest rate than the PIK anyway) or maybe they sold something.
just be vary, when we heard our owners paid off 120m of loans 2 years ago, sky bastards just borrowed them from america from another bank lol which cost them in the end so it worked out well in the end
no
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The Derry Pele
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NAN17
Nov 16 2010, 12:02 AM
maybe they sold something.
Yeah i heard they upped the prices of the pies slightly at half time
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stacie
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So United were paying off the loan but not the interest payments? It's good to not have it at all but at least you weren't paying interest on it.
flak and gary love stacie and weep sorrowful tears when she's not around

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IRL
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MU Finance PLC financial results for the first quarter ended 30th September 2010.

MU Finance PLC announces that it will release its Financial Results for the quarter ended 30th September 2010 on 16th November 2010.

The Earnings Release will be made available on the MU Finance PLC website
(Manchester United - MU Finance) at approximately 11:00 GMT (06:00 EST) on 16th November 2010.

This will be followed by a conference call and presentation to investors at
12:00 GMT (07:00 EST).

Should be intertesting
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RubberToe
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Not really, it will probably show that Utd made about 100million profit or something :lol: - missed the bit where it said quarter :doh:
Edited by RubberToe, Nov 16 2010, 09:21 AM.
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stacie
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Don't blame them for paying off the whole thing before the interest payments go up again but as they have the money why didn't they just pay it off before it got to that point anyway?
flak and gary love stacie and weep sorrowful tears when she's not around

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IRL
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No idea Stace, this stuff is way over my head
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RubberToe
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stacie
Nov 16 2010, 09:21 AM
Don't blame them for paying off the whole thing before the interest payments go up again but as they have the money why didn't they just pay it off before it got to that point anyway?
The question is, as titles pointed out, where has the money come from to pay for the PIK? The article suggests that the money isn't coming directly out of Utd.
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Monty
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Financial expert on SSN believes it could be the begining of part or whoe takeover of the club.

I think the most likely sources though are a, A new Loan or b, they sold another of their assets.
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