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UNITEDRANT

Truth about Ronaldo cash – earmarked for debt

January 12, 2010 Tags: , Shorts 16 comments

Manchester United confirmed last night what many fans have suspected – money the club made from the sale of Cristiano Ronaldo to Real Madrid is earmarked for debt. Buried within the club’s Prospectus, promoting the Glazer family’s £500 million debt swap, is the revelation that £70 million of United’s cash will be set aside for debt repayment.

United has £116.6 million in available cash, says the Prospectus, which is used for ongoing operations, tax, interest and repayments on the club’s £500 million senior loan. But in refinancing, the club intends the release £70 million – the bulk of the Ronaldo cash – to Red Football Joint Venture Limited, United’s parent company.

Reading between the lines, £70 million will pay down some of the Glazers’ Payment in Kind (PIK) debt, which is attracting 14.25 per cent annual interest. A further £75 million is being borrowed as an ongoing credit facility – essentially to pay interest on United’s loans, which will grow substantially as a result of the bond issue.

The next time the Glazers says there’s money for transfers – ask where its from. Because the only available source will be debt.

16 comments

Dee Mac - January 12, 2010 Reply

We cannot take lightly the current situation….It is obvious that it is having an unsettling effect on the team…….Sir Alex has done great with what he has….Bot The Glazers…are not upto the job……Just more Yank Wannabees………Maybe The Scousers and us should do a combined protest………..They’ve got Statler & Waldorf from the Muppets & we’ve got The 3 Stoogie’s with their father…..

Johnno - Manc - January 12, 2010 Reply

Glazers have also stripped £20 million out of the club to pay themselves “management fees”.

DanS - January 12, 2010 Reply

We’re screwed for sure in the transfer market. No way round it! Just knew when Fergie talked about value for money. It’s never stopped us spending big before.

ja - January 12, 2010 Reply

“The next time the Glazers tell you there’s money for transfrs – ask where from.”
Yes the Ronaldo money has gone to the banks. Any new transfer money would appear to have to come from the new ’75 million revolving credit facility’ aka overdraft!. Or player sales. What price Vidic going this summer for a big fee and either a very cheap replacement or no replacement arriving, in the case of the latter, because the market is overvalued!

Stretty - January 12, 2010 Reply

I’ve been saying the same for ages, the Ronaldo money is gone and Fergie has got nothing to spend. He can keep banging on about “value” in the market as much as he likes, but I think more and more fans are starting to see through it.

jezz09 - January 12, 2010 Reply

Looks like united are heading for really big shit. And for the forseeable future, there is no sign of the glazers loosening their grip. I’ve heard in recent days about a fund-raiser, whereby all man utd’s fans across the globe team together and donate £5 each for the good of the club. This would go a long way toward paying off our debt and mean Manchester United would be in a hugely more stable condition. Now i do understand that many fans would be bitter about donating, because the Glazers would effectively have obtained the club for free, but we are the best fans in the world and I believe many would look at it as saving our club at all costs. With little repayments we would be making huge profits an be a genuine contender in the transfer market again. The only other way out is the glazers selling, and finding a buyer would be extremely difficult, plus they wont walk away until they know for sure that their investment cannot be rewarded. By then it could be too late. What do people think about this?

MTVB - January 12, 2010 Reply

Jezz, I can understand the emotive thinking behind a fundraiser but it would mean us financing the Glazer debacle twice over. Many of us contribute to ticket prices (vastly inflated now), merchandise etc. in order to ‘service the debt’ so why should we do so again? If we contribute like you suggest, don’t think for a moment that the G’s would prudently invest it all in repaying the debt – one word… greed

jezz09 - January 12, 2010 Reply

Fair enough MTVB, You make big points. But with merchandise, people may only buy a jersey every 2-3 years. obviously some of us buy 2 or 3 a season. There are costs involved to be taken out of the prices for merchandises and the rest ends up as cashflow. Money gets to the club in bits and pieces. I’m talking about a collection by an Independant(TRUSTWORTHY) organisation whom would be liable if money went missing, so that all the money would be given at one time. The club would only be allowed to have the money, if the Independant was alowed to pay the debt directly without going through the glazers. You Know, it is estimated that there is over 330 million United fans worldwide? And I think that is a huge under-estimate. So even £2 would do it. £2! you’d barely pick it up of the street. It’s not an awful lot to save our beloved club. Im also sure donations would be forthcoming from larger sources if our effort was seen. This wouldn’t solve all of our problems, but things would be much more promising.

ja - January 12, 2010 Reply

jezz, that is a total non runner if the Glazers remain in control. If everyone chipped in as you suggest, the Glazers could pay off all the debts and then simply remortgage the club and trouser the proceeds.
Phillip green did that at BHS in taking out a huge loan to pay his Monaco based (tax exile) wife a massive dividend (something in the region of a billion if I recall).
The glazers have helped themselves to 20 odd million in loans and consulting fees when the club is 700+ million in debt, how much would they ‘reward’ themselves with if the club were debt free?

Red Paddy - January 12, 2010 Reply

You could buy the club for that Money and give the yanks the red card so to speak.

olliewillie - January 12, 2010 Reply

I don’t see a quote in that article anywhere

Ed - January 12, 2010 Reply

I’ve provided a link to the full 322 page prospectus – it’s all in there, go read!

nicorn7 - January 15, 2010 Reply

Daily Express rumour says Rooney may be sold to service debts. I know the Express are more fiction than fact but just thought of Rooney being sold (especially to Barca or Real) makes me mad!

Will Man City type Saudi takeover save United?

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