I can't believe anyone has forgotten that some of the IPO proceeds were supposed to go towards the debts. Andersred and co did a better job than I thought.
ALL issues relating to the bond issue and club finances
- Thread starter sammsky1
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Oh yeah, that's where it came from. Just got from a newbie:
Proceeds of the IPO
In the current year quarter the Company raised £70.3 million following the public offering of shares on the New York Stock Exchange. The proceeds were used to repurchase the Company’s US dollar denominated senior secured notes (see “Borrowings” below) – the principal value of which was £62.6 million.
During the quarter we re-purchased and retired the sterling equivalent of £62.6 million of senior secured notes comprising US$101.7 million of US dollar denominated notes. The consideration paid amounted to £67.9 million.
http://ir.manutd.com/phoenix.zhtml?c=133303&p=irol-newsArticle&ID=1758471&highlight=
Andy Green @andersred
#MUFC cash position at 30 Sep, £52.5m. Total debt £359.7m so net debt £307.2m. Getting more manageable.
Andy Green @andersred
#MUFC Q1 IPO proceeds used to repurchase £62.7m of bonds.
#MUFC cash position at 30 Sep, £52.5m. Total debt £359.7m so net debt £307.2m. Getting more manageable.
Andy Green @andersred
#MUFC Q1 IPO proceeds used to repurchase £62.7m of bonds.
Andy Green @andersred
Should be able to get #MUFC interest bill down to under £20m per year post-refinancing.
Andy Green Andy Green @andersred
The next step for #MUFC's debt is to refinance the bonds and reduce the interest bill. Will happen in next 2-3 years.
Should be able to get #MUFC interest bill down to under £20m per year post-refinancing.
Andy Green Andy Green @andersred
The next step for #MUFC's debt is to refinance the bonds and reduce the interest bill. Will happen in next 2-3 years.
Also from the same newbie (your mailbox is full, btw):
We're getting $18.6m each for this year and next before it kicks to £70m.
Only July 26, 2012, consistent with our strategy to grow our global sponsorship revenue, we entered into an agreement with General Motors for Chevrolet to become our exclusive shirt sponsor, beginning in our 2014/15 season. The term of the agreement runs through the end of the 2020/21 season. Annual revenue from our new shirt sponsorship agreement will be $70.0 million in the first season, and will increase by an additional 2.1% in each season thereafter through the term of the agreement. We will also receive approximately $18.6 million in fees in each of the 2012/13 season and 2013/14 season under the terms of our new shirt sponsorship agreement. Total revenue payable through the end of the 2020/21 season under our new shirt sponsorship agreement is approximately $559 million.
http://www.sec.gov/Archives/edgar/da...10523zf-1a.htm
Page 93
How much of the original debt has been repayed all in all?
Talking about the IPO, has this International Business Times article been posted on here?:
Manchester United Owner Malcolm Glazer Accused of Hiding Financial Details Ahead of Club's IPO
Manchester United owner Malcolm Glazer may have tried to keep certain aspects of the club's finances secret before its initial public offering in August, according to a new report.
Bloomberg suggests that Glazer withheld key information about United's earnings, the level of debt imposed on the club by his 2005 takeover, and the reasons why he was seeking to raise money through the flotation.
Eventually, after a lengthy period of correspondence between United's senior management and the SEC, Glazer was forced to divulge that the club used the £80m sale of Cristiano Ronaldo in 2009 to mask heavy financial losses.
The American tycoon, who borrowed an estimated £540m to buy United in 2005 and has since forced the club to pay it back, also revealed that he took £10m from the club's accounts, describing it as a dividend paid to himself, to repay an earlier loan.
This information was not revealed until a month after United floated on the New York Stock Exchange on 10 August. The shares began trading at $14, a value which, although slightly lower than Glazer originally wanted, valued the club at over $2bn.
It is also reported that United's ownership structure could present a serious risk to investors. Bloomberg asserts that United's decision to incorporate in the Cayman Islands is designed to ensure immunity from potential shareholder lawsuits, and the club now faces higher taxes as a result.
The SEC was unable to extract details on payments to individual directors, which are required by US law. Because United is registered in the Cayman Islands, it does not need to comply with this requirement.
However United executives are adamant that they have never had a problem with the SEC, and continue to cooperate fully with the American regulatory organisation.
"As with every SEC filer, we went through several rounds of SEC comments," the club's director of communications, Phil Townsend, told Bloomberg, adding, "Our interaction with the SEC was very positive and we look forward to many, many years as a US public company."
United announced a loss in its first quarterly financial results as a public company, and analysts predict the club will report a further 2 pence a share of losses when the latest results are announced today. Although the IPO proceeds, re-negotiated sponsorship contracts and new deals with platinum partners such as Chevrolet have helped push the debt below £400m, a raft of expensive summer signings have caused transfer expenditure and wages to rise.
On the pitch United are in a healthy position, having reached the top of the Premier League and qualified from their Champions League group with a 100% record.
Manchester United owner Malcolm Glazer may have tried to keep certain aspects of the club's finances secret before its initial public offering in August, according to a new report.
Bloomberg suggests that Glazer withheld key information about United's earnings, the level of debt imposed on the club by his 2005 takeover, and the reasons why he was seeking to raise money through the flotation.
Eventually, after a lengthy period of correspondence between United's senior management and the SEC, Glazer was forced to divulge that the club used the £80m sale of Cristiano Ronaldo in 2009 to mask heavy financial losses.
The American tycoon, who borrowed an estimated £540m to buy United in 2005 and has since forced the club to pay it back, also revealed that he took £10m from the club's accounts, describing it as a dividend paid to himself, to repay an earlier loan.
This information was not revealed until a month after United floated on the New York Stock Exchange on 10 August. The shares began trading at $14, a value which, although slightly lower than Glazer originally wanted, valued the club at over $2bn.
It is also reported that United's ownership structure could present a serious risk to investors. Bloomberg asserts that United's decision to incorporate in the Cayman Islands is designed to ensure immunity from potential shareholder lawsuits, and the club now faces higher taxes as a result.
The SEC was unable to extract details on payments to individual directors, which are required by US law. Because United is registered in the Cayman Islands, it does not need to comply with this requirement.
However United executives are adamant that they have never had a problem with the SEC, and continue to cooperate fully with the American regulatory organisation.
"As with every SEC filer, we went through several rounds of SEC comments," the club's director of communications, Phil Townsend, told Bloomberg, adding, "Our interaction with the SEC was very positive and we look forward to many, many years as a US public company."
United announced a loss in its first quarterly financial results as a public company, and analysts predict the club will report a further 2 pence a share of losses when the latest results are announced today. Although the IPO proceeds, re-negotiated sponsorship contracts and new deals with platinum partners such as Chevrolet have helped push the debt below £400m, a raft of expensive summer signings have caused transfer expenditure and wages to rise.
On the pitch United are in a healthy position, having reached the top of the Premier League and qualified from their Champions League group with a 100% record.
All of the club's original debt has been repaid, but it's been replaced by the bond issue. The fate of the PIK loans taken out by the Glazers is unknown.
To 'retire' the bonds (i.e. they no longer exist), it has to be done with the clubs money - if the Glazers use their own money then they personally own the bonds which would be of no benefit to the club anyway.
As has been pointed out, this was the IPO cash being used - although they were already doing this before anyway.
In effect they have swapped the bond debt for a part of their equity in the club then, which is fair enough (presuming the investors are happy with what seemed to a layman a pretty un-enticing share issue!).
At the end of the day, shareholders / owners are just another form of liability, but thankfully they are the most stable / benign form possible!
At the end of the day, shareholders / owners are just another form of liability, but thankfully they are the most stable / benign form possible!
Very good day for Manchester United fans concerned with the clubs debt problem.
However, people should be wary about future dividends, inevitable profit will increase, and so will the pressure for a dividend.
However, people should be wary about future dividends, inevitable profit will increase, and so will the pressure for a dividend.
Payment of a dividend to whom exactly? I thought the float of these particular shares on the stock exchange did not entitle the shareholder to any voting rights or any divdend payment?
Andersred is now stating that our annual debt payment will be approx £20m per year, its absolute buttons when you look at our annual turnover. With the increase in tv rights on the horizon and our seemingly neverending sponsorship links the finances are looking extremely healthy.
The float just said there wont be any dividends at the moment - as Jaz said, increasing profits are likely to lead to dividends at some point
The dividend wording in the IPO was fairly standard to IPO's these days. It's just legal speak to ensure they are not liable or misleading anybody in case there is no immediate dividends. Any dividend would apply to all shareholders, including the 90%(?) stake owned by the Glazer's. Voting rights are bit separate from share of the dividend.
If profit steadily increases, the dividends have to happen IMO. Secondly, the dividend could be considerable (probably around 30% of profit). So people will still accuse the Glazer's of stealing money....
I think the shares were bad, but not that bad!
Mind you, never paying a dividend doesn't seem to have done Oracle or Google any harm!
I am sure there are no voting rights.
But that is OK, institutional investors never do anything with them anyway, so called Shareholder Spring notwithstanding.
But that is OK, institutional investors never do anything with them anyway, so called Shareholder Spring notwithstanding.
It's something like each class A share the Glazers own has 10 votes and each class B share (which is what all the stock they sold was converted into) has only 1. So they could keep a mere 10% of the total stock of the company and still have control, if I understand it correctly.
This is where I get a bit lost. What pressure is there on the Glazers to pay a dividend, however big the profit? The shares don't even carry voting rights, what's to stop the Glazers just telling the shareholders where they can stick their dividend?
Err the Glazer's will gain the most from a dividend, they own 90% of shares.
Profit from club --> Goes to --> Glazer pocket
But the Glazers have already demonstrated that there are plenty of ways for them to withdraw money form the club other than dividends.
I think it too. Though if they decide to pay dividents then they will receive only 10%.
Anyway, this scenario cannot work if someone big decides to buy the club, but it could work if many people buy shares individually.
The voting rights are separate from the share in dividend.
The example given is shown how voting rights work: with 10% of the company they can keep control. But in terms of dividends they would only still receive 10%. However, this doesn't matter, they own 90% of MUFC, and will get 90% of the dividend IMO.
More to the point: dividends make it easier for the glazer's to take money out of the club and in proportion to performance. The board and CEO usually decide if a dividend should occur. I don't have a problem with this. Eventually, profits will be big enough to sustain a regular dividend, as it was under the PLC.
Bizarrely hostile article.
Most of this stuff the Glazers were supposedly 'withholding' was already in the public domain. It was discussed constantly on the Cafe.
He was forced to divulge that the Ronaldo money was used to 'mask' heavy financial losses. You don't say! Anyone who downloads a copy of United's accounts for the period could tell you that. It's not exactly a secret. Although the 'losses', iirc, consisted of goodwill write offs and one-off financial costs. The club has always operated profitably.
He 'forced' the club to pay back the debt. How come we weren't aware of this? This must be the first occasion a leveraged buy out has worked in this way.
It seems the necessity to 'spice things up' extends even to financial journalism.
How much are your lot getting per year from the Chevrolet deal?
51M if rumors are true.
Surely that can't be right? Your last deal was for like £25mill only a few years ago and I don't think any team gets much better than that at the moment!The guy who signed it for Chevrolet got sacked tho'.
It is 357M for 7 seasons. And indeed the GM guy who signed it got sacked.
Did the Glazers bribe him or something to get a deal out of him? That is crazy if true, not surprised he did get sacked for the deal, worth twice as much as anything else out there at the moment!
More than enough, to put it blunt.
Yet the guy who signed Chamakh, Squillaci, Santos, Podolski etc. is still in a job. No fair.
If the financial fair play thing is not a complete rubbish we're looking increasingly like the healthiest club out there, we'd be able to spend shit ton on players compared to any other team.
That is if Glazers continue to invest in the squad and the FFP turns out not to be a joke. Big ifs but still, I'm feeling more and more optimistic.
That is if Glazers continue to invest in the squad and the FFP turns out not to be a joke. Big ifs but still, I'm feeling more and more optimistic.
After all Glazers don't look that bad. I mean better if the club would have been controlled by fans but I prefer Glazers before sugar dadys and before other bussinesmans (the Arsenal or Pool owners).
Too true. It's also worth bearing in mind that the Prospectus is put together by the lead bank (Jeffries) [with the securities lawyers] who also advise on what should and should not be included. The process is that a draft goes to the SEC who then respond with a list of changes they want made. Often that will be enough, although it's not unusual for further changes to be requested on the revised draft. Whoever wrote the article either doesn't understand the process or is being deliberately misleading about it.
A further small point is that, since his strokes, Malcolm seems to have taken no part in running any of the businesses let alone United, who he was never involved in the running of anyway. So the idea that he was a party to trying to hide anything is laughable - operationally, it would have to have been Gill and Woodward if anyone.
Well at least he didn't piss away £M on the likes of Anderson, Hargreaves, Berbatov and Young.
None of those would get in even on crutches.
At least two of those players would I reckon Heap. Don't think Anderson would get in there and Hargreaves is a joke right now.
Young's been crap all season and I've just seen Giroud being a good deal better than Berbatov in a head to head. Basically the Man Utd quartet was £90M of flop.
Pete is a good poster. His only problem is that he is every time wrong.
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