United announce record profits as Glazer reduces club's debt

• zocoss

  16 Aug 11, 23:35

  Manchester United looking to raise £600m in Singapore share sale

  • League champions plan to list on Singapore stock market
  • Club was listed in London before Glazer takeover

   

  

  Manchester United are hoping to raise $1bn, according to reports.

   

   

   

  Manchester United plan to raise $1bn (£610m) by selling shares on the Singapore stock market, according to reports.

  The Wall Street Journal has reported that the Premier League champions will carry out an initial public offering in the country this year.

  It has been reported that the club was planning to sell shares in Hong Kong but has now switched its attention to Singapore.

  United was listed on the London Stock Exchange until being taken over by the Glazer family in a deal worth close to £800m in 2005.

  United have not commented on the reports.

   

   

   

• Susanteo2011

  16 Aug 11, 23:37

   

   

  buy the shares at your own dire peril......................

   

   

  same as throwing money into the sea......................

• ahtansh

  17 Aug 11, 10:06

  Is this a way for the Glazer family to milk more money? Sinkies beware! Manu fans don't let you emotions and attachment to the Football club make you loses your head and throw away hard earn money.

  http://www.guardian.co.uk/football/blog/2010/jan/12/manchester-united-glazers-debt

• zocoss

  17 Aug 11, 11:35

  United for sale? Glazers plan to raise £600m with Singapore share flotation
  

   

  

  Protest: The Glazers have been unpopular owners of Manchester United

   

   

   

  The Glazer family are considering selling 30 per cent of Manchester United, raising £600million in the process.

  And that will open up manager Sir Alex Ferguson and chief executive David Gill to public scrutiny by investors.

  News on Tuesday that the owners have appointed a bank - thought to be Credit Suisse - to look into the partial flotation of the club on the Singapore stock market has raised the possibility of United not being owned 100 per cent privately for the first time since 2005.

  Though the Glazers would still hold an enormous majority share interest and essentially retain the right to run things however they wish, it is thought the club would again be required to hold annual meetings and produce detailed yearly finance reports.

  Ferguson and Gill have no cause for concern, but the development would give supporters some insight into how the club is being run.

  In the Glazers' six-and-a-half years in charge, fans have been frustrated by a lack of accountability.

  Whether any of the £600m raised by a flotation would be funnelled back into the club is open to question.

  Experts suggested last night it is more likely to be used to pay off some of the debt the Glazer family have racked up. None of the shares made available in Singapore are likely to fall into the hands of regular United supporters.

  Instead they would be bought by investors in Asia.

   

  The Manchester United Supporters Trust hinted last night they would look to find a way to invest.

  A statement said: 'It is possible shares will not be available to ordinary supporters and MUST will have to provide a mechanism for supporters to buy shares.'

   

   

   

   

  

  Raising money: The Glazer family set to cash in

   

  

  Growth area: around 190 million United fans live in Asia

   

  How the deal could work

  The Glazers are said to be looking to offload 30 per cent of United by selling shares on the Singapore stock market.

   

  How much money do they hope to make?

   

  It is thought the move could raise around £600million.

  By selling about a third of the company the Glazer family would keep control and could use the money to pay down debts of more than £500m which accrue hefty interest.

  It would also establish a price tag for the club.

   

   

  So how much are United worth?

  If the Glazers raised £600m by selling 25 per cent that would value the club at £2.4bn.

  However, reports suggest the final stock market valuation would be closer to £1.7bn. The Glazers paid £780m in 2005.

   

  Why Singapore not London?

  Of the club's 300 million fans, more than 190 million live in Asia, which is seen as a growth area for the club's revenues.

  So is this a good time to be attempting such a move?

  The stock market wobble will not help - and don't forget United made a £105m loss in their last set of accounts.

• zocoss

  17 Aug 11, 12:11

  Originally posted by ahtansh:

  Is this a way for the Glazer family to milk more money? Sinkies beware! Manu fans don't let you emotions and attachment to the Football club make you loses your head and throw away hard earn money.

  http://www.guardian.co.uk/football/blog/2010/jan/12/manchester-united-glazers-debt

  
  Don't be naive... With the Uefa's fair play rules to come into effect within the next year to 3, it would suggest they will used it to clear their bond loans which stand at almost $500m unless they don't want to play in the Champions League anymore...

  These very same people who said the bond issue would be a lost money investment are now looking with envy when it was over subscribe by almost twice... These people may very well get their returns early if the listing goes ahead...

  Anyway, don't expect ordinary investors to get their hands on it as it would most likely be offered to investment houses across asia and the world first and by which time, there will be very few floated in the sgx for the individual investor... Those holding their bond may even be offered to convert it into shares which may mean very little live shares will be available...

  Paying the yearly dividend to their shareholders is almost very similar to servicing their bond issued currently... The only difference is, they will be known as debt-free...

  Just like the currently owners of Liverpool FC isn't an individual at all... They are own by a group of investors and within it, there is a NBA basket ball player too...

• zocoss

  20 Aug 11, 00:15

  Manchester United owners the Glazers promise to cut club debt with £600 million flotation

  The Glazer family have informed the Singapore Stock Exchange that the proceeds of Manchester United’s proposed £600 million flotation will be used to reduce the club’s £480 million debt and strengthen attempts to overcome financially powerful rivals such as Manchester City.

   

  

  Eastern promise: the Glazer family hope to capitalise on Manchester United's popularity in Asia

   

   

   

   

  Telegraph Sport can disclose that United submitted an application to list on the Singapore Stock Exchange earlier this month and expected to achieve a formal listing before the end of the year.

  Sources close to the application process have confirmed that, within the draft prospectus submitted to the Singaporean financial authorities, United’s owners have laid out their reasons for the 30 per cent sale of their holding in the club.

  Central to their submission is confirmation that they will significantly reduce a £480 million debt to make United more competitive in the transfer market.

  The proportion of debt reduction has not been specified, but it is understood that cutting the club’s borrowings, rather than servicing the Glazers’ personal financial commitments, is the primary reason for the partial flotation. The Glazers highly secretive rest of the proceeds will go is unknown. What the highly secretive Glazers will do the rest of the money is unknown.

  United currently pay about £45 million in annual interest payments on the debt that has been saddled on to the club ever since the Glazers secured sole ownership at Old Trafford in May 2005.

  Despite manager Sir Alex Ferguson insisting that the Glazers have fully supported his plans to recruit players, supporters have grown frustrated by the lack of investment in perceived stellar signings, pointing to the interest payments as money that could strengthen the squad.

  With Manchester City backed by the supreme wealth of Sheikh Mansour bin Zayed al Nahyan, United have been regularly outspent by their rivals, who are expected to take their summer spending through the £70 million mark by signing Arsenal’s Samir Nasri in the coming days.

  United had also made an attempt to sign Nasri, but failed to match City’s £25 million offer and £170,000-a-week salary, while efforts to lure Wesley Sneijder from Inter Milan have also foundered due to a reluctance at Old Trafford to meet the Dutch midfielder’s pay demands.

  United are expected to become the first club to announce commercial income of more than £100million when accounts are released in October. The Glazers and senior figures at United believe that the strength of their business model, which has seen total turnover double to almost £300million under the Americans, will ensure the club can compete with City and other wealthy European rivals.

  There is optimism within United that they will be listed in Singapore within two months and that a full prospectus for potential investors will be available by October.

  Some financial experts have expressed surprise at United’s decision to list in Singapore, rather than the larger and more established market in Hong Kong. The club’s popularity in Singapore and the belief that it is a more suitable base for commercial growth in Asia are believed to be behind the decision.

• I-like-flings(m)

  20 Aug 11, 00:50

  loss of 105m... hmmm.. even if you take out the 45M interest.. that mean a loss of 60M... but want to be value at 2.4b? hmmm.. significantly reduce debt....but how much is that?? hmmm.. alot of ??????

• Keii

  20 Aug 11, 00:59

  No one dare to buy in Singapore because the money goes to the Glazers, not the club.

• zocoss

  20 Aug 11, 01:08

  Originally posted by I-like-flings(m):

  loss of 105m... hmmm.. even if you take out the 45M interest.. that mean a loss of 60M... but want to be value at 2.4b? hmmm.. significantly reduce debt....but how much is that?? hmmm.. alot of ??????

  
  There were one off stuff like the bond issue... That cost $63m which won't be in this year's or future account...

  Selling tickets or the income from TV rights used to be their biggest income but not anymore... Commercial deals have taken over... And they are probably about to become the only club with commercial income alone of more than £100million per season...

  Their shirt deal with Nike is coming to an end too and they are expected to sign a new one estimate to worth around $600m pounds... The growth potential is definitely there...

  The Singapore sgx is fighting hard to get them to list in sg rather than seeing them go to HK...

   

• Y_Shun

  20 Aug 11, 02:21

  from MU pov, i think HK listing is better.

   

• zocoss

  20 Aug 11, 11:07

  When you think of it, it won't make much difference HK or SG cos only 25% to 30% of its actual stock will be release and of these, a good percentage will be taken up by trading houses who invest with a long term view. So we can expect very little will actually be traded therefore the price will not move in great numbers...

  Also, I think they may decide to go with the Sgx as the ST reported that the sgx are desperate to beat HK to the deal as it would be like they pull off a coup if they really do land the Man United brand... I  am guessing sweetener may have been thrown in to persuade them to list here instead as earlier reports said United were keen to list on the Hang Seng initially...

  Anyway, I find it a very smart move by the club / Glazers for the future... They have been good owners despite what some want to make them out to be... And in a few years time when Uefa's fair play rule takes effect, they will be in a good position compare to some others as they generate their own income to purchase players... Which is acceptable to Uefa. Those depending on rich owners may have a problem or have to think of another way to make big money purchases in the future if they don't generate their own income...

   

• dragg

  20 Aug 11, 11:17

  why here and not hong kong should be the question?

• I-like-flings(m)

  20 Aug 11, 11:49

  Originally posted by dragg:

  why here and not hong kong should be the question?

  
  we all know the answer right?? like zocoss said

  "The Singapore sgx is fighting hard to get them to list in sg rather than seeing them go to HK.."

  so........... u know lah......

• zocoss

  20 Aug 11, 12:37

  Originally posted by I-like-flings(m):

  
  we all know the answer right?? like zocoss said

  "The Singapore sgx is fighting hard to get them to list in sg rather than seeing them go to HK.."

  so........... u know lah......

  
  That's what was reported in the ST...

  But it make sense come to think of it...

• I-like-flings(m)

  20 Aug 11, 12:41

  Originally posted by zocoss:

  
  That's what was reported in the ST...

  But it make sense come to think of it...

  
  of cos it make sense....... SGX hungry for any company now lah.... as long as dun lose to HKEx.......but buyer beware lor...... got potential.. but just alot alot of ?????????? it's a very good brand... just got concern with it's board of director only....

• zocoss

  20 Aug 11, 13:08

  Originally posted by I-like-flings(m):

  
  of cos it make sense....... SGX hungry for any company now lah.... as long as dun lose to HKEx.......but buyer beware lor...... got potential.. but just alot alot of ?????????? it's a very good brand... just got concern with it's board of director only....

  
  Not just any companies... Branded companies.

  Since the board was form it has been seeing continuous growth since 2005 so there shouldn't be any misgivings... The value of the company has grown in the last 6 years alone from a £790m one to now worth over a billion pounds...

  I dare say if it goes ahead with its IPO of only 25% to 30% of its shares, it would again be over subscribe like their bond issue exercise... Cos the news it's generating has already attracted a worldwide attention. So the main buyers won't come from Singapore but overseas... Sgx will only be like a proxy to them to generate funds to clear their debts... But I guess they will be more than happy to do so as it gives them the prestige of having it listed on their exchanged...

  Anyway, this is just in its initial stages, for all we know they may change their minds and go with HK or not even seek listing after studying its feasibility...

   

   

• Y_Shun

  20 Aug 11, 13:27

  the bond won't be cheap but which institutional investors will buy? i find it hard for the trust or something to give out dividends yearly.

• Y_Shun

  20 Aug 11, 13:28

  anyway in a way, man utd is still in debt. releasing this bond issue just extends the deadline to repay their debt only.

• I-like-flings(m)

  20 Aug 11, 14:57

  With SAF & Co there... i really dun see any BIG contribution from the board to be credited for the last 6 yrs growth.....

• the Bear

  20 Aug 11, 14:59

  how old is SAF?

• zocoss

  20 Aug 11, 16:11

  Originally posted by I-like-flings(m):

  With SAF & Co there... i really dun see any BIG contribution from the board to be credited for the last 6 yrs growth.....

  
  As I recall before the Glazers came... There were a few different shareholders during those time... From horse owners to invertment companies and even a Celtic director... The 2 horse owners directors were always looking for trouble with the manager and the CEO... The club was getting negative publicity in the press on a weekly basis... Remember?

  Maybe too much success in recent years could make one forget the bad times of yesteryears... But those days, Fergie's purchases were like one quality player and the rest were like Kleberson, David Bellion, Dong Fangzhuo, Eric Djemba Djemba, those that didn't cost much money kind... or a young Fletcher that everyone got upset when they see his name in the starting 11 remember those days?

  SAF was also there between 2003 to 2006 and they were not good weren't they?

  It needs two hands to clap... Sometimes by not doing anything is better than wanting to do too much... What if they decided to play their own Football manager and buy who they want and order the manager to play him? worse right?

   

• zocoss

  20 Aug 11, 16:17

  Originally posted by Y_Shun:

  the bond won't be cheap but which institutional investors will buy? i find it hard for the trust or something to give out dividends yearly.

   

  Err... The bond thing already done way back early last year... Over subscribe too... That one is over... Finish.

  This is an IPO listing on a stock exchange... or at least an application... It's a totally different thing... Just like Roman convert his Chelsea's £800m to £1 billion loans into shares in order to keep Chelsea debt free... But since it's a private company, they don't need to list it. And also since it's an artificially pop up company/club, the true value of the listing price won't reflex the sum Roman have put in... A company need to be profitable and have potential for growth to have a chance of getting listed... Example Chelsea or City's books of consecutive annual losses won't make it...

  For now, it's just an application, not necessarily will go ahead unless they decide to... It's like getting a license first, and when you got it, then you can decide whether you want to drive or not later I guess...

  Err... also, don't be confuse... The current debt comes from the bond issue now... They have convert their bank loans to bonds in the last exercise. Maybe for some reason with Uefa's fair play rule, they don't permit bonds to be excluded as loans too maybe? 

  The listing will clear its debt... It's like take Arsenal for example... There are a few different shareholders formerly... If one director had been a bank, then they will be considered owing the bank a loan too on top of their existing load/debts... Payment made to the loan interest is almost like paying dividends to a shareholder... The difference will be more owners / shareholders and debt-free to one owner with a bank loan...

• Y_Shun

  21 Aug 11, 15:18

  Originally posted by zocoss:

   

  Err... The bond thing already done way back early last year... Over subscribe too... That one is over... Finish.

  This is an IPO listing on a stock exchange... or at least an application... It's a totally different thing... Just like Roman convert his Chelsea's £800m to £1 billion loans into shares in order to keep Chelsea debt free... But since it's a private company, they don't need to list it. And also since it's an artificially pop up company/club, the true value of the listing price won't reflex the sum Roman have put in... A company need to be profitable and have potential for growth to have a chance of getting listed... Example Chelsea or City's books of consecutive annual losses won't make it...

  For now, it's just an application, not necessarily will go ahead unless they decide to... It's like getting a license first, and when you got it, then you can decide whether you want to drive or not later I guess...

  Err... also, don't be confuse... The current debt comes from the bond issue now... They have convert their bank loans to bonds in the last exercise. Maybe for some reason with Uefa's fair play rule, they don't permit bonds to be excluded as loans too maybe?

  The listing will clear its debt... It's like take Arsenal for example... There are a few different shareholders formerly... If one director had been a bank, then they will be considered owing the bank a loan too on top of their existing load/debts... Payment made to the loan interest is almost like paying dividends to a shareholder... The difference will be more owners / shareholders and debt-free to one owner with a bank loan...

  nono i saying the current listing

• zocoss

  21 Aug 11, 18:45

  Oh... Ok, bond and listing are two separate things lor...

  On bond, you pay a yearly fixed interest for a period of time... It's safer but you don't make much the longer it goes... It's like a fixed deposit in a bank account. The only way you lose is the company or bank go bust which is normally very unlikely... 

  While listing on exchange means you pay dividends to shareholders once, twice a year depending on the board... But the gains are far greater too as shareholders as the share price may go up and taking inflation into consideration, the longer you hold on to it, the higher the share is likely to go if business is running as per normal...

  So don't worry, if the bond can be over subscribe, the shares will be very much the same too considering only 30% will be available and not 50% to 70%... If people dare to buy its 7yrs bond issue, it means they are confident the company won't go bust in that time frame and they are able to get their money back...

  And in their draft prospectus submitted to the Singaporean financial authorities which have been made known the reason for their listing... "Central to their submission is confirmation that they will significantly reduce a £480 million debt to make United more competitive in the transfer market." meaning the money generated from the listing will go into clearing its present debts... The current interest payment could become dividends to future shareholders...

  They can't lie about such things one as it's an undertaking to the exchange to get approval to be listed... Sgx have a reputation to protect too... 

   

• DailyFreeGames.com

  22 Aug 11, 02:18

  i am a man utd fan but investing in the club is really bad investment decision... right now the value is at a certain amount but consider this, man utd is now peaking... what happens if man city or liverpool or chelsea took over the domination of man utd, the value of the club will tank (think about liverpool glory days, then becomes the decade of man utd, what goes up will come down) and in financial terms, the worst time to invest is when the shares are at the peak... you want to invest when the shares are low and sell when it's high... right now man utd is nearly or is already peaking, i can say this, any player can leave man utd and it will be just as strong, but once alex ferguson leaves, that's it... i love man utd but i hate glazers. even in fm manager i am running FC United...