Liverpool FC Forum

by **112-1077774096** » Tue Jul 24, 2007 12:04 pm

MANCHESTER United has been forced to put a proposed £660m refinancing deal on ice, after falling victim to the growing turmoil in global credit markets.

The Glazer family, the American leisure tycoons who bought the club two years ago, had been talking to a number of banks about a new finance package, including JP Morgan, Royal Bank of Scotland and Deutsche Bank.

The move could have allowed the club to buy out the remaining tranche of high-interest loans owed to US hedge funds. The high level of debt and the high interest costs involved in the deal provoked criticism from the club's fans at the time of the original takeover.

But the soaring cost of debt in the capital markets has derailed the club's plans, adding Man Utd's name to a long list of companies that have been forced to rethink their financing plans.

KKR, the private equity giant, is locked in talks with banks on new terms for the £9bn debt package required to back its takeover of Alliance Boots. The debt package is expected to cost KKR £250m more than had previously been expected.

In the past month there have been 28 major corporate bond or loan deals pulled, worth $17bn (£8.3bn), according to research by Barings Asset Management. There were no major debt deals pulled in the year to the end of June.

Senior investment bankers believe the backlog of unsold debt building up in the world's major banks now totals £100bn.

The decision to temporarily withdraw the Glazers' latest refinancing plan was confirmed on Saturday night by David Gill, Manchester United's chief executive, who was in Macau for the latest leg of the club's pre-season tour of Asia.

Gill said the benign state of the debt markets until recent weeks had presented an opportunity to examine financing options.

"The last refinancing in August 2006 put in place a long-term structure and we have been looking at both refinancing the existing debt as well as a securitisation of 'match day' revenues," he told The Sunday Telegraph.

"It's correct that the debt markets have become choppier recently, so we are not going through with either of those options right now."

About £270m of the takeover financing came through expensive "payment-in-kind" (PIK) loan notes. Half of these notes were bought out as part of last year's refinancing.

According to banking sources, a full refinancing of Man Utd's existing debt was intended until two weeks ago, which would have allowed the club to cut its interest payments.

It is understood that market conditions led the club to look instead at buying out the remaining £135m of PIK notes - the most costly part of the finance package. Now all refinancing plans appear to have been deferred.

A spokesman for the Glazers said there never been a firm decision taken on whether or not to proceed with a refinancing. (The Sunday Telegraph)

by **babu** » Tue Jul 24, 2007 12:29 pm

you'd know better than me peewee, but i don't think this will affect them too much. They had planned to refinance some of their debt into more conventional bank loans, this just seems to be a bit of a delay. When the market settles, i am sure they will go ahead with it.

i seriously doubt this could have any affect on their day to day operations, but it may cause a 6 month to 1 year delay before the Glazer's sell, thereby screwing MU (i have patience, i can wait.

)

by **112-1077774096** » Tue Jul 24, 2007 12:36 pm

yeah mate its nothing major as long as the markets pick up again, but there is always a chance that will take time, stopping any re financing from the glazers, which is nice

by **Big Niall** » Wed Jul 25, 2007 12:32 pm

I would like to thank my fellow Limerick man JP McManus for buying nearly 30% of the shares of the club for relatively cheap,sitting back a few years and then forcing the Americans to take huge debt to buy him out.

Mission accomplished agent Mcmanus - return home.

by **King Cantona** » Sun Jul 29, 2007 2:48 pm

Big Niall wrote:I would like to thank my fellow Limerick man JP McManus for buying nearly 30% of the shares of the club for relatively cheap,sitting back a few years and then forcing the Americans to take huge debt to buy him out.

Mission accomplished agent Mcmanus - return home.

Yeah, as a United fan I have no love for the Glazers but I keep reading that David Gill or Alex Ferguson keep saying how they are great and they're in for the long haul...

Well how come I read a few months ago that the Glazers wanted out and were willing to sell because they found out that Man United weren't the cash cow they had imagined, football's like that you daft yanks, you need a lot more than money invested in a football club...

by **babu** » Mon Jul 30, 2007 2:43 am

King Cantona wrote:Well how come I read a few months ago that the Glazers wanted out and were willing to sell because they found out that Man United weren't the cash cow they had imagined, football's like that you daft yanks, you need a lot more than money invested in a football club...

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