I hope this never happens at Norwich

[paul moy 235]

Manure are selling 100m in shares on the US stock market in order to pay down some of their debt which at the moment is crucifying them. Never ever allow anybody to take over our beloved club using DEBT !!!!!

[Thirsty Lizard 3,183]

Why would anybody want to buy shares in a club which won jack ....s**t last season?

[Gingerpele 0]

Because they are Manchester United, probably still the biggest club world wide.

[It's Character Forming 1,166]

Absolutely.   It shows they are really struggling financially.  The report I saw mentions that they have over £400m of debt, the listing in the US is aiming to raise $100m or around £65m, which will be used purely to pay down debt.

 

Let''s face it, when they sold Ron for £85m all of that seemed to go to pay down debt too, if they''d had the money to reinvest in the team, would ManC have been able to pip them to the title last year ?

 

Going forward being listed will give them problems too - I remember one club that was listed having to bring forward an announcement about changing the manager due to insider trading problems.

 

All in all I can see ManU getting into difficulties, especially when Sir A is no longer at the helm.

[Thirsty Lizard 3,183]

I know Gingerpele, I know! I was just pleased to see them not winning anything last season - makes a change.

[Bethnal Yellow and Green 1,596]

http://www.guardian.co.uk/football/2012/jul/04/manchester-united-debt-cayman-islands

http://www.guardian.co.uk/football/blog/2012/jul/04/manchester-united-glazers-shares-debt

 

It''s well worth reading these articles to understand the details. It''s incredible how Gill and SAF have denied the massive burden of debt on the club has affected the transfer policy. When you look at the players they have been buying recently it is easy to see they aren''t in for the best players in the world like they use to be. I saw somewhere that Man U''s net transfer spend over the last few seasons was lower than Stokes.

[Tangible Fixed Assets anyone? 0]

[quote user="paul moy"]Manure are selling 100m in shares on the US stock market in order to pay down some of their debt which at the moment is crucifying them. Never ever allow anybody to take over our beloved club using DEBT !!!!![/quote]

I would hardly say its crucifying them.

Based on the Accounts to Q3 2012 I should imagine that by the end of Q4 that:

EBITDA - interest and tax will leave them not far off covering the £47m related to net player expenditure and the £17m of capital expenditure in the first nine months of the 2012 financial year.

 

So the Glazers have an asset some claim is worth US$2.4 Billion (roughly £1.6 Billion) and the club has a gross debt of £423m less cash of £25m as at 31st March 2012.

 

[Tangible Fixed Assets anyone? 0]

BTW. in lay mans terms, net player expenditure is the cost of transfers in less sales regarding transfers out.

[nutty nigel 7,618]

[quote user="Tangible FPA"]BTW. in lay mans terms, net player expenditure is the cost of transfers in less sales regarding transfers out.[/quote]

 

So it''s much the same as in FPAs terms.

 

[paul moy 235]

[quote user="Tangible Fixed Assets anyone"]

[quote user="paul moy"]Manure are selling 100m in shares on the US stock market in order to pay down some of their debt which at the moment is crucifying them. Never ever allow anybody to take over our beloved club using DEBT !!!!![/quote]

I would hardly say its crucifying them.

Based on the Accounts to Q3 2012 I should imagine that by the end of Q4 that:

EBITDA - interest and tax will leave them not far off covering the £47m related to net player expenditure and the £17m of capital expenditure in the first nine months of the 2012 financial year.

 

So the Glazers have an asset some claim is worth US$2.4 Billion (roughly £1.6 Billion) and the club has a gross debt of £423m less cash of £25m as at 31st March 2012.

 

[/quote]

The fact that they have to have a share issue in order to reduce massive interest payments says to me that it IS crucifying them. This scenario was predicted when they were bought in 2005 and they really would be in the mire if they ever fail to qualify for the Champions League.

They are now being overtaken by Man City and my bet is that Chelsea, Arsenal, Spurs, Newcastle etc could be pushing them out of the top four before long. Scholes, Giggs, Ferdinand will soon have to be replaced and Manure must be worried about funding this. Thus they have this desperate share issue.

[Highland Canary 76]

From an accounting perspective I would fully endorse Tangible''s analysis.

The reason Manchester City are surpassing Manchester United is simply the greater investment/backing of the owners of that club. Unsurprisinly, there is a strong, positive correlation between a club''s wage bill and PL finishing position. Put simply Manchester City have the deepest pockets in the PL, we should not be surprised by their success. 

[PurpleCanary 5,580]

[quote user="Bethnal Yellow and Green"]

http://www.guardian.co.uk/football/2012/jul/04/manchester-united-debt-cayman-islands

http://www.guardian.co.uk/football/blog/2012/jul/04/manchester-united-glazers-shares-debt

 

It''s well worth reading these articles to understand the details. It''s incredible how Gill and SAF have denied the massive burden of debt on the club has affected the transfer policy. When you look at the players they have been buying recently it is easy to see they aren''t in for the best players in the world like they use to be. I saw somewhere that Man U''s net transfer spend over the last few seasons was lower than Stokes.

[/quote]

 

To add some detail that isn''t in the admirable Conn pieces:

Last August Man Utd planned to raise $1bn in a share offering in Singapore. That got put on hold, not surprisingly given the state of markets. This much smaller offering in New York, even if revised upwards from the planned $100m, looks very much like a second-best option. Especially as football plays better in Asia than it does in the US. It was no accident that Singapore was the Glazers'' preferred location.

As to whether it will be taken up in part or in whole, we shall see. The Glazers certainly hope it will, as this wonderful bit from the offering prospectus makes clear:

“Our indebtedness increases the risk that we may be unable to generate cash sufficient to pay amounts due in respect of our indebtedness. It could also have effects on our business.”

But these are shares that effectively have no voting rights and there will be no dividend for the foreseeable future. Not the attractive offer out there. Even if it is entirely subscribed, to the tune of $100m, that will only cut the debt by a bit less than a quarter. And, as Conn says, this is effectively hard external debt that has to be repaid, with interest. Although owed to the owners, it is not like the soft debt due to other Premier League owners, such as Smith and Jones or Abramovich.

[paul moy 235]

Accounting-wise, of course Manure have a rosey picture as the owners get their dividend each year and interest payments are financed, but in the real football world, in order to maintain their No 1 club status they are in the mire as they need to generate funds to invest in their future and they are failing to do this to the level required because of the enormous debt burden. Their supporters saw this coming in 2005 and so did many others.

[Tangible Fixed Assets anyone? 0]

[quote user="paul moy"]Accounting-wise, of course Manure have a rosey picture as the owners get their dividend each year and interest payments are financed, but in the real football world, in order to maintain their No 1 club status they are in the mire as they need to generate funds to invest in their future and they are failing to do this to the level required because of the enormous debt burden. Their supporters saw this coming in 2005 and so did many others.[/quote]

In the Q3 2012 Accounts I can''t see any dividend! I wish we were a club that had £64m spare (£47m spent on transfers and £17m on capex.). Its just that they are competing against a club (Man City) with what appears to be unlimited funds and that the size of Man Utd debts almost seems irrelevant in that scenario.

I have wondered why they are even bothering with a US$100m IPO as the impact on the interest charge is not very much, e.g., if the interest is say 10% then the reduction in the interest costs is  US$10m (roughly £6m). Hardly a sign of people desperately raising funds is it? 

 

 

[Tangible Fixed Assets anyone? 0]

Purple Canary,

Could you please advise me as to the source of the Man Utd prospectus for the Asian IPO that never happened.

Thanks.

 

 

[PurpleCanary 5,580]

[quote user="Tangible Fixed Assets anyone"]

Purple Canary,

Could you please advise me as to the source of the Man Utd prospectus for the Asian IPO that never happened.

Thanks.

 

 

[/quote]

 

Since the Asian IPO never got off the ground there may not have been a prospectus. But if you''re are interested in finding out I would suggest you check with Morgan Stanley, who were going to be the lead underwriters.

As to the prospectus for the US offering, which does exist, and from which I quoted, that can be obtained from Jefferies, the New York investment bank. Its HQ is on Maddison Avenue but it also has a London office, in Upper Thames Street.

 

[TIL 1010 4,791]

Jeffries tel no. 020 7029 8000.

Morgan Stanley tel no. 020 7245 8000.

I hope this helps Tangible.

[TIL 1010 4,791]

[quote user="TIL 1010"]

Jeffries tel no. 020 7029 8000.

Morgan Stanley tel no. 020 7245 8000.

I hope this helps Tangible.

[/quote]

Morgan Stanley should read 7425 so apologies if i confused you Tangible.

[paul moy 235]

[quote user="Tangible Fixed Assets anyone"]

[quote user="paul moy"]Accounting-wise, of course Manure have a rosey picture as the owners get their dividend each year and interest payments are financed, but in the real football world, in order to maintain their No 1 club status they are in the mire as they need to generate funds to invest in their future and they are failing to do this to the level required because of the enormous debt burden. Their supporters saw this coming in 2005 and so did many others.[/quote]

In the Q3 2012 Accounts I can''t see any dividend! I wish we were a club that had £64m spare (£47m spent on transfers and £17m on capex.). Its just that they are competing against a club (Man City) with what appears to be unlimited funds and that the size of Man Utd debts almost seems irrelevant in that scenario.

I have wondered why they are even bothering with a US$100m IPO as the impact on the interest charge is not very much, e.g., if the interest is say 10% then the reduction in the interest costs is  US$10m (roughly £6m). Hardly a sign of people desperately raising funds is it? 

 

 

[/quote]

Er..... so why raise all this money if they don''t need it ?   You didn''t see dividends in 2012 probably because Manure cannot afford them any longer, but rest assured the owners have been squeezing their share out of the profits over the last seven years. Interest payments were about 40 million a year a few years back I recall.

So you endorse this model for our club ?   I certainly don''t.

 

 

[Tangible Fixed Assets anyone? 0]

[quote user="paul moy"][quote user="Tangible Fixed Assets anyone"]

[quote user="paul moy"]Accounting-wise, of course Manure have a rosey picture as the owners get their dividend each year and interest payments are financed, but in the real football world, in order to maintain their No 1 club status they are in the mire as they need to generate funds to invest in their future and they are failing to do this to the level required because of the enormous debt burden. Their supporters saw this coming in 2005 and so did many others.[/quote]

In the Q3 2012 Accounts I can''t see any dividend! I wish we were a club that had £64m spare (£47m spent on transfers and £17m on capex.). Its just that they are competing against a club (Man City) with what appears to be unlimited funds and that the size of Man Utd debts almost seems irrelevant in that scenario.

I have wondered why they are even bothering with a US$100m IPO as the impact on the interest charge is not very much, e.g., if the interest is say 10% then the reduction in the interest costs is  US$10m (roughly £6m). Hardly a sign of people desperately raising funds is it? 

 

 

[/quote]

Er..... so why raise all this money if they don''t need it ?   [/quote]

Exactly! 

 

[Tangible Fixed Assets anyone? 0]

Thanks Purple.......I already have the F1 re the US. IPO.

 

[PurpleCanary 5,580]

[quote user="Tangible Fixed Assets anyone"]

[quote user="paul moy"]Accounting-wise, of course Manure have a rosey picture as the owners get their dividend each year and interest payments are financed, but in the real football world, in order to maintain their No 1 club status they are in the mire as they need to generate funds to invest in their future and they are failing to do this to the level required because of the enormous debt burden. Their supporters saw this coming in 2005 and so did many others.[/quote]

In the Q3 2012 Accounts I can''t see any dividend! I wish we were a club that had £64m spare (£47m spent on transfers and £17m on capex.). Its just that they are competing against a club (Man City) with what appears to be unlimited funds and that the size of Man Utd debts almost seems irrelevant in that scenario.

I have wondered why they are even bothering with a US$100m IPO as the impact on the interest charge is not very much, e.g., if the interest is say 10% then the reduction in the interest costs is  US$10m (roughly £6m). Hardly a sign of people desperately raising funds is it? 

 

 

[/quote]

 

The Glazers don''t seem to agree. I highlighted yesterday evening what looks like the key part of their New York IPO prospectus:

“Our indebtedness increases the risk that we may be unable to generate cash sufficient to pay amounts due in respect of our indebtedness. It could also have effects on our business.”

And I see The Guardian has this morning picked up on this paragraph. Of course $100m is not much, but it may be all the Glazers think they can expect to get; the significant figure is the $1bn they wanted to raise  in Singapore.

[norfolkbroadslim 223]

Reminds me of the good old Morgan Stanley Dean Witter Card........................

[paul moy 235]

[quote user="Tangible Fixed Assets anyone"][quote user="paul moy"][quote user="Tangible Fixed Assets anyone"]

[quote user="paul moy"]Accounting-wise, of course Manure have a rosey picture as the owners get their dividend each year and interest payments are financed, but in the real football world, in order to maintain their No 1 club status they are in the mire as they need to generate funds to invest in their future and they are failing to do this to the level required because of the enormous debt burden. Their supporters saw this coming in 2005 and so did many others.[/quote]

In the Q3 2012 Accounts I can''t see any dividend! I wish we were a club that had £64m spare (£47m spent on transfers and £17m on capex.). Its just that they are competing against a club (Man City) with what appears to be unlimited funds and that the size of Man Utd debts almost seems irrelevant in that scenario.

I have wondered why they are even bothering with a US$100m IPO as the impact on the interest charge is not very much, e.g., if the interest is say 10% then the reduction in the interest costs is  US$10m (roughly £6m). Hardly a sign of people desperately raising funds is it? 

 

 

[/quote]

Er..... so why raise all this money if they don''t need it ?   [/quote]

Exactly! 

 

[/quote]

Perhaps you should tell them !! Also. I see you''ve removed the rest of my reply.  I wonder why...... some more truth perhaps ?

 

[PurpleCanary 5,580]

[quote user="PurpleCanary"][quote user="Tangible Fixed Assets anyone"]

[quote user="paul moy"]Accounting-wise, of course Manure have a rosey picture as the owners get their dividend each year and interest payments are financed, but in the real football world, in order to maintain their No 1 club status they are in the mire as they need to generate funds to invest in their future and they are failing to do this to the level required because of the enormous debt burden. Their supporters saw this coming in 2005 and so did many others.[/quote]

In the Q3 2012 Accounts I can''t see any dividend! I wish we were a club that had £64m spare (£47m spent on transfers and £17m on capex.). Its just that they are competing against a club (Man City) with what appears to be unlimited funds and that the size of Man Utd debts almost seems irrelevant in that scenario.

I have wondered why they are even bothering with a US$100m IPO as the impact on the interest charge is not very much, e.g., if the interest is say 10% then the reduction in the interest costs is  US$10m (roughly £6m). Hardly a sign of people desperately raising funds is it? 

 

 

[/quote]

 

The Glazers don''t seem to agree. I highlighted yesterday evening what looks like the key part of their New York IPO prospectus:

“Our indebtedness increases the risk that we may be unable to generate cash sufficient to pay amounts due in respect of our indebtedness. It could also have effects on our business.”

And I see The Guardian has this morning picked up on this paragraph. Of course $100m is not much, but it may be all the Glazers think they can expect to get; the significant figure is the $1bn they wanted to raise  in Singapore.

[/quote]

 

The other point about the Man Utd debt (currently just the £423m) is that it matures in 2017. So only five years in which to undertake some kind of debt management/reduction/rearrangement/elimination exercise. Hence the aborted Singapore IPO. Hence this rather tiddly New York IPO. I wouldn''t say the Glazers are desperate exactly, but they obviously need to do something about the debt. And why New York rather than London, which is the obvious place for an English club to do business? You can get away with less transparency in New York.

[Tangible Fixed Assets anyone? 0]

Purple Canary,

You and I know, debt can be rolled over, e.g., NCFC the £2.5m loan regarding the ex LSE land was rolled over when it was due and we didn''t exactly have a lot of spare cash at that point did we? However I do except the idea that this may be the start of a gradual (i.e. not desperate) reduction of the debt with later issues of shares that the Glazers hope will be at higher prices (thanks to future increased TV and commercial revenues) 

Secondly as you and I know, IPO prospectus have a section about potential risks hence:

“Our indebtedness increases the risk that we may be unable to generate cash sufficient to pay amounts due in respect of our indebtedness. It could also have effects on our business.”

I haven''t checked but it wouldn''t surprise me if they list:

Players may get injured which may result in poor team performance which may result in lower revenues......

---------------------------------------------------------------------

 

 

 

 

[Tangible Fixed Assets anyone? 0]

[quote user="paul moy"]

Also. I see you''ve removed the rest of my reply.  I wonder why.. ?

[/quote]

Some time ago peple moaned that I used the whole of peoples posts when I answered, now you moan when I only reference the part I was answering. I can''t win either way!

[Tangible Fixed Assets anyone? 0]

[quote user="paul moy"]

Er..... so why raise all this money if they don''t need it ?   You didn''t see dividends in 2012 probably because Manure cannot afford them any longer, but rest assured the owners have been squeezing their share out of the profits over the last seven years. Interest payments were about 40 million a year a few years back I recall.

So you endorse this model for our club ?   I certainly don''t.

[/quote]

I haven''t seen any dividends in the 2011, 2010 and 2009 accounts of MU Finance Plc either.  I suspect that you might be thinking about the £10m. loan (which is charged at 5.5% interest), that six Glazers (approx £1.66m each) had from Red Football Ltd that appeared in note 30 on page 39 of the Accounts for the year ended 30th June 2010.

From the Glazers point of view if the club really is worth £1.6Bn and if you assume they can pay off the debt less cash of approx. £400m via share issues (at the current price) then their stake may be valued at £1.2Bn. for a layout of £250m??  If this is so I think the Glazers will argue thats good business.

With respect to the Manchester United fans, how many trophies have Manchester United won since the Glazers became the owners?

With reference to Norwich City Football Club, while we haven''t had a LBO., in the past we leveraged ourselves up with debt beyond the cost of building the Jarrold stand....was that a good idea?  

BTW. I''m not a fan of LBO.''s with respect to football clubs.

 

[Victor Segura and the Yellow Cards 0]

Options:

1) A girlfriend

2) A hobby

3) Drugs/Alcohol

4) Exercise

5) Binge Eating

Just anything to make you a little less boring Tangible Fixed Assets Anyone?....I don''t mean that to be offensive at all, but getting out now and again really does have it''s benefits.

[PurpleCanary 5,580]

[quote user="Tangible Fixed Assets anyone"]

Purple Canary,

You and I know, debt can be rolled over, e.g., NCFC the £2.5m loan regarding the ex LSE land was rolled over when it was due and we didn''t exactly have a lot of spare cash at that point did we? However I do except the idea that this may be the start of a gradual (i.e. not desperate) reduction of the debt with later issues of shares that the Glazers hope will be at higher prices (thanks to future increased TV and commercial revenues) 

Secondly as you and I know, IPO prospectus have a section about potential risks hence:

“Our indebtedness increases the risk that we may be unable to generate cash sufficient to pay amounts due in respect of our indebtedness. It could also have effects on our business.”

I haven''t checked but it wouldn''t surprise me if they list:

Players may get injured which may result in poor team performance which may result in lower revenues......

 

 

[/quote]

 

Of course. I haven''t read through this Man Utd prospectus but apparently out of the 143 pages no fewer than 21 are devoted to risks of various kinds...

But probably one - although unspoken - risk that has prompted this move is that continuing to pay interest on debt of more than £400m is affecting the club''s player buying power. This season Man Utd didn''t qualify for the knock-out stage of the Champions'' League. Even more nightmarish than a repeat of that failure would be not qualifying for the Champions'' League at all. Not an inconceivable scenario.