Manchester United aim to raise £500m in bond sale in bid to reduce mounting debt

11 January 2010 07:40
Having bought United in a £790m takeover in May 2005, the Florida-based Glazer family have since seen the club's debt rocket. In 2008, interest payments of £69m accounted for £72m of profit. [LNB]But with Sir Alex Ferguson's first-team squad flying out to Qatar on Sunday for a warm-weather training break, the club has confirmed that moves are being made to raise £500m in bonds. [LNB] Related ArticlesSir Alex Ferguson faces fresh FA banDimitar Berbatov faces knee operationBirmingham 1 Manchester United 1Premier League actionPremier League tableMan Utd Transfer TalkA United statement said: 'Manchester United today announced that it will be seeking to raise approximately £500m aggregate principal amount from an offering of senior secured notes due 2017. [LNB]'The notes, whose proceeds will be used to refinance existing debt secured against the club, will be issued by MU Finance Plc.' [LNB]United manager Ferguson had insisted on Friday that the club's debt was unrelated to his spending power and that he had substantial money to spend following last summer's £80m sale of Cristiano Ronaldo to Real Madrid. [LNB]Ferguson said: "I have got all the money I need. The money is available and, if I wanted to buy someone, I could get the money. [LNB]"I could easily have spent the Ronaldo money but I didn't want to do it because I couldn't see any value in the market. Believe me there is no impact (on the transfer fund)." [LNB]The move to issue bonds is aimed to alleviate the Glazers' Pik (payment in kind) loans which are carry a 14.25 per cent interest rate. The outstanding loan is understood to be approaching a figure of £200m. [LNB]Ferguson added on Friday that he believed the bond issue was a good move for the club's financial situation. [LNB]He said: "I don't have any concerns about the financial situation. There is absolutely no issue at all with the club's finances. [LNB]'There is debt there, but it has never interrupted my plans for the team at any stage. [LNB]'I have no issue at all. There has been talk about a bond issue and I think that's a good thing for the club. Anything that helps with the repayment of the debt is a good thing.' [LNB]

Source: Telegraph