Belfast Telegraph

'No imminent plans' for share sale

Manchester United's executive vice-chairman Ed Woodward insists the Old Trafford outfit has "no imminent plans" for a new share sale that could earn the Glazer family millions.

United's controversial American owners have attracted scorn from many of the club's supporters since they completed a highly leveraged takeover in 2005.

Yet predictions of financial meltdown for the club have not materialised, with annual results announced this week confirming the club's debt had fallen to £389.2million.

Whilst this is still an enormous sum, given United are expecting to generate revenue of over £420million this year when the effects of a massive new television deal start to be felt, it is evidently manageable.

Instead, fans critical of the Glazers have been focusing on the vast sums that have seeped out of the club since 2005, estimated to be around £680million, to facilitate the leveraged takeover and its aftermath.

The club confirmed earlier this week finance costs had risen £21.3million to £70.8million due to a restructuring of the 2010 bond issue.

It has been argued such sums could have been used to further strengthen David Moyes' squad in a summer when Marouane Fellaini was the only significant addition and United were frustrated in a number of other attempted signings.

Some fans have even suggested a long-discussed expansion of Old Trafford, which would involve a huge amount of building work on the South Stand, should have been revisited, whilst others have called for a reduction in ticket prices.

Instead there is the spectre of the Glazer family pocketing more cash with another share sale.

They raised £70million from an initial part flotation on the New York Stock Exchange last year and papers for a "shelf filing" issued with this week's results would allow them to raise a further £243million - based on an existing share price of around 17 US dollars - in the coming months.

However, club sources insist the shelf filing was done as a matter of course because over 12 months have now passed since the original flotation and merely allow the Glazers to take advantage of any fluctuation in market conditions, which would also allow for further refinancing in addition to a share sale.

According to Woodward, any refinancing is unlikely until after February 2014, when repayment penalties on the present bonds, which are not due to expire until 2017, reduce significantly.

At that point though, with those penalties for buying back US dollar bonds earlier than their maturity date set to reduce from 108.375 per cent of the bond price to 104.188 per cent, the club could save millions and understandably want to be in a position to react.

"As we sit here today there are no imminent plans around a secondary, or indeed, primary or public security issue," said Woodward in a midweek conference call to investors.

"We are always discussing the market and keep our finger on the pulse, looking at what products might make sense.

"But we have the step down on the coupon in February 2014 so it is probably unlikely before then. There are no plans around refinancing final piece."


From Belfast Telegraph