Football Talk - Man Utd look to refinance despite £48m profit - 11/01/10
Manchester United have confirmed that they will look to raise £500 million through bonds to restructure their debts. The announcement came as the club announced pre-tax profits of £48.2m for the year to 30 June 2009, compared with a loss of £21.4m a year ago.
The Premier League champions have been struggling under interest payments due on the debts which the Glazers ran up when borrowing in order to purchase the club. In the year up to June 30, 2009, they had to pay out £41.9 million in interest payments.
Although the club did record a pre-tax profit of £48.2 million, that figure includes the world recrod £80 million raised from the sale of Cristiano Ronaldo to Real Madrid. Excluding that sale, United would have been reporting a loss of £31.8 million. Group turnover rose to £278.5m from £256.2m the previous year.
"Manchester United today announced that it will be seeking to raise approximately £500 million aggregate principal amount from an offering of senior secured notes due 2017,'' said a United statement. "The notes, whose proceeds will be used to refinance existing debt secured against the club, will be issued by MU Finance plc.''
The bond will be used to repay the "senior secured notes". It was thought that the Glazers would be looking to finance the £175 million worth of payment-in-kind notes that are currently attracting 14.25% interest. However, this is considered personal debt and will not be refinanced through bonds.
