Monday, May 23, 2005
Glazer details £790m Man Utd takeover
Malcolm Glazer tonight laid bare the extraordinary details of the borrowings required to complete his £790million takeover of Manchester United.
The Tampa Bay Buccaneers owner has already stated he intends to use United's assets as security against a £265million loan from bankers JP Morgan.
But, in the details of his formal offer document which was released to shareholders on behalf of Red Football today, Glazer has revealed a succession of steepling interest charges that take the approximate overall cost of the money lent on that loan alone to a massive £570million.
And that figure does not include a bridging loan of £18.9million which has to be paid back in March next year, plus another £90million as a credit and capital expenditure facility, which had never previously been mentioned and could be used to fund the much-heralded stadium expansion.
And there is still another £275million in preferred securities, which it is anticipated he will refinance almost as soon as the deal is done.
If United fans were shaky about the prospect of the 76-year-old American business tycoon running their club prior to Saturday's FA Cup final defeat to Arsenal, those fears will be acutely exacerbated now, with it estimated that the club's debt alone will turn out to be an horrific £650million, over six times the amount which almost sent Leeds to the wall.
It confirms why Red Devils chief executive David Gill described Glazer's business plan as `aggressive' and `potentially damaging' to the long-term interests of the club.
Yet, amazingly, Gill is likely to be charged with delivering the massively increased profits Glazer is convinced are available to the world's most profitable soccer club.
Within the offer document was again confirmation that the Glazer family wanted to work with the current management and a statement that not all the four current board members of Red Football – Joel and Avi Glazer, Mitchell Nusbaum and William Sondericker – will sit on United's board.
It is becoming clear though, that Joel, a 38-year-old graduate from American University in Washington, will patrol the Glazer family interests in the Old Trafford outfit.
Having taken a 76.2% stake in United, shareholder reaction to the offer document is largely irrelevant, although a deadline of 3pm on Monday, June 13 has been imposed.
The following morning, Red Football will confirm precise details of their stake in United. It is then envisaged Glazer will apply to cancel United's Stock Market listing on June 22.
It had been anticipated an informal statement to supporters from Joel Glazer would be incorporated within the offer document, but those rumours proved to be wide of the mark.
Instead, Glazer is likely to keep his counsel, at least until the share sale deadline has expired and possibly the delisting announcement before making any public utterances.
By then, the full scale of United's debt burden will have sunk in and Glazer will need to persuade supporters of the validity of his plans.
The £275million has been divided into four parts, £55million, two lots of £62.5million and £85million, with repayments taking between seven and 10 years at a rate between 2.75% and 6.5% above base rate.
Although the base rate is low – around two percent – the premiums are still huge and impossible to pay back without a massive increase in present profits.
The most recent half-year figure for United was £8.1million in March and after a third-place Barclays Premiership finish and another early exit from Europe, there is no immediate rise in prospect.
On the basis that the Glazers are far too astute to just throw their money away, precise details of their plans are awaited with eager anticipation.
It is has already been suggested that the price of corporate tickets will rise significantly, while there could also be the possibility of a naming rights package involving Old Trafford.
There has also been talk of a franchising arrangement allowing companies such as McDonalds to have stores inside the ground.
Glazer will also be keen to raise the percentage of turnover coming from overseas.
Of the £159million United earned last year, only £9million was spent from outside the United Kingdom, a paltry return on the club's vast global support.
It also appears inevitable that Glazer will attempt to alter the structure of the current television contract, either by wrecking it completely through a court challenge or by forcing the Premier League to allow United a greater percentage of income.
Glazer is expected to go before the NFL finance committee, of which he is a member, to explain the deal when team owners meet in Washington tomorrow.
The repayment figures are worked out as follows:
Debt repayment terms of the £275million loan from JP Morgan secured against Manchester United.
£55million – payable over seven years at 2.75% above LIBOR (London InterBank Offered Rate). Repayment cost – £90million.
£62.5million – 50% payable over seven years, six months, 50% payable over eight years at 3.25% above LIBOR. Repayment cost – £110million.
£62.5million – 50% payable over eight years, six months, 50% payable over nine years at 3.75% above LIBOR. Repayment cost – £128million.
£85million – payable by April 2015 at 6.5% above LIBOR. Repayment cost – £242million.
LIBOR rate approximately 4.6%.
source: http://soccernet.espn.go.com/headlinenews?…=334143&cc=4716
Nak tengok Manchester United bankrupt pastu masuk Division 2 dalam masa 8 tahun?
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