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Old 11th January 2010, 23:22   #1
Paul Brooks
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Location: Wheelieville, REPUBLIK OF MANCUNIA.
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Wink United are back in the black

United are back in the black

January 11, 2010

MANCHESTER United announced it will tap foreign investors for £500m to tackle its debts after accounts revealed the club had returned to profit, but only thanks to the world record sale of Ronaldo.

United yesterday posted pre-tax profits of £48.2m for the year to June 30, 2009 - compared with a £21.4m loss in 2008 - but without the £80m Real Madrid paid for Ronaldo in June, it would have lost £31.8m.

Revenues from player transfers earned United £80.7m in 2009, up from £21.8m in 2008.

The club, bought by the US-based Glazer family in 2006, had debts of £509.5m at the end of its last financial year and shelled out £41.9m in interest payments on loans alone during the period.

It will hold roadshows in Asia, the USA and Europe later this month in an effort to find buyers for £500m of secured loan notes, which the club says will be used to refinance its existing debts.

The Glazer family, which also has other sporting interests in the US, bought the club for £828m in an acquisition that was criticised by fans for being funded by borrowings.

The club’s debts include £175m borrowed from two American hedge funds controlled by the Glazers which are reported to be charging 14.25 per cent interest every year.

Manchester United Supporters’ Trust chief executive Duncan Drasdo said "This bond issue is just rearranging the deck chairs and still leaves the club with huge debts which they expect supporters to continue to fund.

“Under the Glazers ownership the club has become liable for more than £260m in interest payments alone and the latest trading statement would have shown a substantial loss were it not for the sale of Ronaldo.”

Mr Drasdo added: “It is in everyone’s interest for the Glazers to exit and make way for a new investor interested in working with the supporters to build a stronger football club and business together.”


The accounts revealed that United’s match day revenues were up at £108.8m from £101.5m.

Media revenues rose to £99.7m from £90.7m and commercial revenue generated £70m, up from £64m.

Overall turnover grew from £256.2m to £278.5m.

Sources said the club would dramatically improve its financial position and ultimately achieve lower interest payments if it eliminated an expensive and ballooning form of junior debt known as payment-in-kind notes.

Bankers say the high-profile Manchester United bond will be the first of many similar deals by companies worldwide to refinance secured loans.

http://www.manchestereveningnews.co....k_in_the_black
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