Manchester United confirmed on Monday they will look to raise £500 million through bonds to restructure their debts.
The Premier League champions have been struggling under interest payments due on the debts which the Glazers ran up when borrowing in order to purchase the club. In the year up to June 30, 2009, they had to pay out £41.9 million in interest payments.
Although the club did record a pre-tax profit of £48.2 million, that figure includes the £80 million raised from the sale of Cristiano Ronaldo to Real Madrid. Without the sale of Ronaldo, the Red Devils would have been reporting a loss of £31.8 million. Turnover was up in the financial year, from £80.4 million in 2008 to £91.3 million.
The bond will be used to repay the "senior secured notes". It was thought that the Glazers would be looking to finance the £175 million worth of payment-in-kind notes that are currently attracting 14.25% interest. However, this is considered personal debt and will not be refinanced through bonds.
"Manchester United today announced that it will be seeking to raise approximately £500 million aggregate principal amount from an offering of senior secured notes due 2017,'' said a United statement. "The notes, whose proceeds will be used to refinance existing debt secured against the club, will be issued by MU Finance plc.''
But the Glazers will not be selling the club and intend to use the money saved from restructuring the debt to ensure significant money is available to Sir Alex Ferguson to spend in the transfer market.
ESPN Soccernet has been assured that the bond is not a prelude to a sale or in any way a manouvre to attract a buyer. The bond should attract institutions and City investors which will enable the club to repay at a stable and affordable rate of interest.
However, ESPNsoccernet has been informed by City experts, that this is by no means an attempt to find a new owner, or to sell the club, that is definitely not on the agenda.
Despite the world being in recession, Manchester United are the most profitable club in the world at a time when clubs like Manchester City and Chelsea are recording massive losses. But fans remain concerned about the bottom line without the Ronaldo cash.
The Glazers message is clear - none of the clubs figures, nor their desire to reshape their loans of £509 million impacts on manager Sir Alex Fergusons ability to reinvest in the transfer market So far Sir Alex has stated it is because he cannot find the players of the right quality and price, rather than it being a question of not having the money.