Source: Manchester_EveningNews
Fergie can still buy
SIR Alex Ferguson will have a substantial transfer kitty to dip into this summer. That's the view of a financial expert in the wake of United's decision to issue bonds to ease the club's crippling debt. It will come as comfort to increasingly worried Reds fans. Despite Ferguson's insistence he would have funds to spend big if he wanted, the United support has largely been sceptical. Fans were dubious that the champions could still compete in the transfer market with the astonishing £700m debt weighing the club down. Ferguson has barely touched the £80m world record fee banked from the sale of Cristiano Ronaldo to Real Madrid and insists he wouldn't be doing business this January. It fuelled fears that the Old Trafford boss could only strengthen a faltering United on the cheap. And Reds followers have been alarmed and angry since the Glazers saddled the club with the £700m debt when they took over in 2005. Interest on a colossal £509m loan the American owners took out to buy the club cost the Reds a mammoth £42m in interest in the last financial year. Cash Though the club announced profits of £48.2m, had it not been for the cash raked in for Ronaldo, United would have been announcing a loss of £31.8m. For a club in profit up to the takeover, it is a reality that is hard for many to swallow. Many have bitten the bullet while United have remained a trophy-winning super power able to pay record transfer fees, as in the past, for the likes of Rio Ferdinand, Wayne Rooney and Dimitar Berbatov. With the squad looking increasingly like it needs costly rebuilding work, supporters have become scared that United are teetering on the brink. However, the issuing of the £500m worth of bonds to restructure the debt is predicted to be a lifeline that should ensure the Reds boss won't have his hands tied in the summer. "I would be very surprised if there wasn't a reasonable pot of money available for Sir Alex Ferguson in the summer, if not a substantial one," Vinay Bedi of financial experts Brewin- Dolphin told M.E.N. Sport. "It might not be the full £80m that is supposed to be available from the Ronaldo sale but it could be a considerable sum. Spending "If the manager was thinking of spending around £50m then I believe he could do that and there might be even more available." The success of the £500m bond issue will determine the size of the pot. But experts believe the Glazers are likely to be on a winner with the decision to restructure the debt in this way. "The bond issue is going to be attractive to investors," Bedi added. "It is a very sensible strategy. Basically, what an investor might do is buy £10m worth of the bonds at, for example, an interest rate of seven per cent. "Every year for the length of the loan agreement, which maybe seven years, they will get seven per cent interest on their investment. At the end of the period of the loan they will also get the £10m back. "It is a better investment than the savings rate at the moment so it is attractive to investors and it is a more attractive proposition for United than the situation they are currently in. "The target is £500m but I think it will go down well and they could reach £600m or £700m. If that happens the club will be in an even better financial position and there will be more money available for transfers. "This will all happen pretty quickly so fans will know how successful it has been soon. We are not talking six months I think we will have a good idea in three or four weeks how good it has been."
