Yes and, for the purposes of mitigating risk, suitable collateral. In United's case, the club would be unable to service a debt of, say, £3bn+ from its operating cash flow and any lender would probably rather have the debt collateralised against Ineos' assets, since the company is significantly larger and more valuable than Manchester United. To answer your question, Ineos could therefore probably get away with transferring some but not all of the acquisition debt obligation to United, if they wanted to.
Club Sale | It’s done!
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Yes and, for the purposes of mitigating risk, suitable collateral. In United's case, the club would be unable to service a debt of, say, £3bn+ from its operating cash flow and any lender would probably rather have the debt collateralised against Ineos' assets, since the company is significantly larger and more valuable than Manchester United. To answer your question, Ineos could therefore probably get away with transferring some but not all of the acquisition debt obligation to United, if they wanted to.
Why is the thread title becoming harder to understand? this time its for book readers and librarians only.
Interesting point.
The Glazer’s, if I’m not mistaken, initially took external loans to purchase United and then following the purchase dumped them on the club.
So here, Sir Jim, initially takes the loans on INEOS what would stop him dumping them on the club?
Found this from Kieran Maguire
“The news from the Premier League is a lot of smoke and mirrors,” Maguire told Football Insider’s Sean Fisher.
“Once you start to look at the small print, by all accounts, you’re not allowed to borrow more than two-thirds of the purchase price at the initial acquisition date.
“But that only lasts for 12 months.
“So therefore after a year what we could have is, in fact, a worst-case scenario where a bidder effectively borrows from a third party or non-traditional sources for the first year and then revamps to a 100 per cent owned LBO after a year.
https://www.footballinsider247.com/...917m-man-united-reveal-not-good-for-football/
Leveraged buyouts are up to 65% of clubs worth, so SJR can leverage a buyout up until that amount however im not sure how it would effect any future buyout attempts, I think it would throw a spanner in the works considering SJR does not have 2bln capital to throw at the club and considering the club will be worth more in the proposed staggered deal he would need even more cash.
What's more is INEOS has the cash on hand but he would have a hard time convincing shareholders and his partners to simply let a one off payment of that size go out without some sort of repayment structure (leveraged buyout) significantly he would also need to fund future expenditure (probably on borrowing) so once you add this to the legal challenge from an inflated stock price on other stock owners his bid is effectively over.
What's more is INEOS has the cash on hand but he would have a hard time convincing shareholders and his partners to simply let a one off payment of that size go out without some sort of repayment structure (leveraged buyout) significantly he would also need to fund future expenditure (probably on borrowing) so once you add this to the legal challenge from an inflated stock price on other stock owners his bid is effectively over.
My limited knowledge is that because the club would still be a separate legal entity it is very difficult to move the liability on them. I think Manchester United (the club) would have to voluntarily ask for the the debt or Ineos itself get into financial hardships and the debt be restructured (but then you'd assume they would have to sell the club). There are likely other ways but I don't think it makes sense, I don't really understand how it would benefit Ineos (or whatever subsidiary of Ineos buys United) even if they could because the debt remains the same, they still have to pay the same amount and (I think) they can still choose to use United's profits to pay that debt anyway without needing to physically move the liability.
It's hard to gauge considering the promised investment and debt servicing, but in current economic value of United might well be 5-6bln.
Each sale is different but the Suns got $4bln valuation just half an year ago and they have the half of United's revenue. On top of that NHL, NBA and other teams that we recently bought out are limited to probably one market, whilst United's appeal is very much global hence a lot more alleys for profit and more of a global brand. United also hold 1.6bln worth of assets, so yeah valuation around the 5bln mark is fair.
That’s the nature of the beast with United and a problem with it’s enterprise value being far lower than it’s apparent market value.
It’s probably not for this thread anyway but if an EPL side was being sold for £350m for example then it becomes more relevant.
The media are really trying to portray that both parties are still in the race, gotta be incredible naive to think both parties are just sat there twiddling their thumbs waiting for the phone to ring.
If Sheikh Jassim were appearing in any other context than to potentially be United's (likely state-backed) sugar daddy, most people here would probably despise him. He's a nepo baby that's never earned any of the jobs he's had nor any of the wealth he's acquired.
Ah, I see you're familiar with most billionaires.
So, a like for like replacement of the glazer sons?
All billionaires are cnuts.
Some are competent cnuts.
The Brit media are not clued in at all by looks of it. So just playing it safe...
They’re clueless. They just keep releasing filler pieces that say nothing to generate clicks because they’ve got no new information of any substance.
Well you'd look like a right twat if you called it wrong. It's not worth the reputational risk. Lots of journalists predict stuff in private they would never say publicly. The average morning news conference is a million times more informative than what goes public as final product.
I really hope I'm wrong but I can´t get out of my head that Joel and Avram would go over corpses for SJR to get back with a similar bid as Jassims (full buyout) just so they could accept that as a final "feck you" to most (well many at least) of us fans.
The Times Ratcliffe PR machine in full swing today
That’s exactly what I was talking about - great find thanks.
JR does love an attempted big club purchase
If he doesn’t get United I wonder who the next attempt will be? Fourth time lucky perhaps?
Professional club bidderJR does love an attempted big club purchase
If he doesn’t get United I wonder who the next attempt will be? Fourth time lucky perhaps?
Bidding for but not buying clubs is what brings him joy.
He travelled to Barca games years ago since it was more convenient for him than going to Chelsea / United anymore
Evidently.
The actor hadn't been cast in the role of Jassim yet.
SJR is the edger for buying big football clubs.
Will go off like an oil well if he ever succeeds.
Will go off like an oil well if he ever succeeds.
JR does love an attempted big club purchase
If he doesn’t get United I wonder who the next attempt will be? Fourth time lucky perhaps?
I hope he goes for the dippers
Watching MUTV at the time
Maybe he just doesn’t spend a lot of time with his family because he lives abroad?
Says he works/worked for various banks? You have to live in the country you’re working in for those roles. He was also schooled in England as a kid which is why he supports United.
He does?
You can’t really just directly move a liability to a different company, there has to be an asset transferring as well, which is how double entry accounting works. In Ineos’s case it would take on the debt liability, but would hold the investment in Manchester United (formerly plc).
As Tomaldino says, what you can absolutely do is get your subsidiary to pay its parent company dividends out of its profits, or any other sort of management charge, to provide its parent company with sufficient cash to service the debt used to buy it. Comes to much the same thing, but there is a distinction.
is this the football equivalent of stealing other peoples knickers off the washing line without ever hooking up with a person?
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