Prestwich_Blue wrote:
Just want to make it clear. They can raise more than $100m as this is an illustrative figure only. There are three outcomes as I see it.
1) This goes ahead successfully and they raise the $6-700m they need to clear their debts, meaning the Glazers' game plan has more or less come off. They're going to be a force to be reckoned with again on the pitch as it will free up their cash flow for buying players instead of paying interest, which will enable them to attract a top class manager. That means the Glazers are sitting on a valuable, debt-free asset (although we don't know what their own finances are like). That's clearly a good outcome for them.
2) It goes ahead and is a bit of a flop, with the banks holding most of the shares They will presumably put a lot of pressure on the Glazers to sell, in order to protect their investment. That can surely be the only reason for them agreeing to underwrite this. It's difficult to say what this will mean for them.
3) It doesn't come off and never even hits the market because there's not enough interest at the price they want. Then they're in a mess. Baconface is about to retire, the squad relies on Scholes & Giggs and there's little cash to fund new acquisitions, just at the time we've overtaken them on the field (and will get even stronger). The clock is ticking on the £423m of outstanding bonds they have to repay and any spare cash will have to go on reducing this debt, as the Ronaldo money did. That's most likely a pretty disastrous outcome for them.
I'd love it to be (3) but we can't rule out the others.
I thought the share issue was only going to raise £60m, even after this they will still have significant debt.
I am surprised that in these globally austere times there are banks willing to take a speculative punt on what is a very risky proposition - but there you go.
Personally I think it is going to be a momentous and spectacular failure which will send the Glaziers back to the drawing board leaving them scratching their heads and thinking OH SHIT!!!
The banks will receive an underwriting fee from Utd if it goes ahead, and it's their job to find clients and to price it correctly