Rags in financial trouble?

[80s Shorts]

Hearing in the last few minutes ........

Needs a source. You should know you can't come on here waving this kind of gold nugget without a reliable source.

I've a good mind to report this to the mods.

I already have.

 

[jake28]

They'll be bought by the Chinese sovereign wealth fund knowing there luck

 

[citysince88]

Any more news on this PB ?

Hearing in the last few minutes that the rags are short of cash and might struggle to meet the half yearly interest payment on their bonds (c£20m). As a result the Glazers are urgently seeking external investment.

Please let this be true.

 

[bluemoondays]

Any more news on this PB ?

Hearing in the last few minutes that the rags are short of cash and might struggle to meet the half yearly interest payment on their bonds (c£20m). As a result the Glazers are urgently seeking external investment.

Please let this be true.

I'd be very surprised, £20m is peanuts when you have a turnover of £300m+. On top of that they are always going find some mug from Singapore or elsewhere who will loan them that much.

 

[Prestwich_Blue]

Any more news on this PB ?

Hearing in the last few minutes that the rags are short of cash and might struggle to meet the half yearly interest payment on their bonds (c£20m). As a result the Glazers are urgently seeking external investment.

Please let this be true.

Not heard any more on this. We'll see how it develops.

 

[Prestwich_Blue]

I'd be very surprised, £20m is peanuts when you have a turnover of £300m+. On top of that they are always going find some mug from Singapore or elsewhere who will loan them that much.

I was surprised as well but there are a number of factors that make it possible. The first is that turnover and profit don't necessarily equate to cash in the bank.

They generate about £100m a year in cash but over half of that has been going on bond interest and other finance charges plus they splurged out last summer on De Gea, Jones, etc. They also have to find some way of paying the capital off the bonds and they've been doing that in dribs and drabs.

Another factor is that when Rooney doubled his wage, a few others did on the back of parity clauses in their contracts. That might have taken about £25m extra out of their cash flow.

Then they went out of the CL when they'd normally expect to get to the semis at least. Factoring in ticket income, prize money and other commercial income, that might well cost them £30m.

Finally the Glazers announced they'd paid of the very expensive PIK loans but not how they'd done that. Almost certainly it involved more debt and they'll have to pay that off somehow. Their US property interests aren't doing that well so the rags is their only source of significant liquidity I'd guess. So if they've shovelled a load of money out, it's entirely possible they could be short of cash. Football clubs tend to get large chunks of cash in at either end of the season (prize money from the previous season & season ticket money) and have to make that last through the season. Typically, at this time of year, most clubs are short of cash and even the rags have ot use their overdraft I believe.

 

[BoyBlue_1985]

and Colombo apparently discovered America :)

Sorry mate, had to do it :)

 

[Prestwich_Blue]

and Colombo apparently discovered America :)

Sorry mate, had to do it :)

I didn't get this at first but assume it's like the Titanic/Queen Victoria's dead sarcastic comments about old news.

You'd be wrong as this is an entirely new development. They've always seemingly had enough cash to meet their debt repayments in the past. If they haven't then it could lead to all sorts of turmoil for them.

 

[BoyBlue_1985]

I cant find this info anywhere Prestwich. I know you have your insiders but i would think it would of broke somewhere in the news

 

[fbloke]

The need for a cash injection is not unusual.

City under Thaksin had to ask Wardle for a short term loan for example.

But as I understand it the problem United have is that the owners of the club don't intend to put any 'further' money INTO the club at all and so when that need for a cash injection arrives it inevitable that they look to outside sources.

The new, hidden debt post PIK notes has occurred after they moved their company to the ultra secret Delaware -

http://www.telegraph.co.uk/sport/fo...hip-of-the-club-to-a-company-in-Delaware.html

which is far from coincidental.

After all of that happened they investigated the idea of a part float in the far east on terms only the desperate fan would accept, and yet they went to the large investors with it and unsurprisingly it hasnt moved forwards due to lack of interest.

Now, only months later the same owners that moved the company to a place where scrutiny is impossible, have failed to raise money in the far east and didnt bother in Europe are scratching round for an investor to cover further interest payments.

How much debt have United's owners got? - Hundreds of millions of pounds?

How do they service that debt? - From Uniteds cash flow?

How did the PIK notes get repaid? - From new, more expensive debt?

There are more questions than answers due to the secret manner in which the Glazers do business but what we do know is that they once had £150m+ in cash in United and that that has diminished greatly.

We also know that their costs are going up far greater this season than ever before and that is happening when their revenues have taken a massive hit from CL elimination.

And it also happens to come at a time when other clubs are making the g'tee of future CL revenues less likely than ever before.

Roll up, roll up for the great Rooney sale?