The pre-tax profit includes £41.9 million paid out in interest on the massive loan of £509.5 million. In other words if Man United didn’t sell Ronaldo, United today would have announced a loss of £31.8 million.
On Man United’s official website ManUtd.com it states some more figures:
Red Football Ltd - the holding company of Manchester United Ltd - has published the following summary for the financial year ended 30 June 2009. More detailed results to follow.
Group turnover for the year was £278.5 million (2008: £256.2 million). Operating profit before depreciation and amortisation of intangible fixed assets for the year was £91.3 million (2008: £80.4 million). Profit before tax for the year was £48.2 million (2008: Loss of £21.4 million).
There have been rumours over the past few days that Man United are set to raise a large amount of money. Today Man United have officially confirmed that they are trying to raise £500 million through bonds. Man United owe £509.5 million in bank loans, the bonds would be used to refinance existing debt.
Man United also made a statement on ManUtd.com about trying to raise £500 million.
It reads:
Manchester United will be seeking to raise approximately £500 million aggregate principal amount from an offering of senior secured notes due 2017.
The notes, whose proceeds will be used to refinance existing debt secured against the Club, will be issued by MU Finance plc.
None of the notes or the guarantees to be issued in the offering have been or will be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
This announcement does not constitute an offer to sell or a solicitation to buy in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction and is not intended to provide the basis for any credit or other evaluation of any securities or offering referred to herein.
This is all very complicated but I am going to try and explain it as best I can. Man United are trying to replace the existing debut of over £500 million with bonds that investors will buy. Man United will still have to pay interest but it will be an awful lot less than the amount that they are having to pay now. Having to pay £41.9 million interest a year is proving too much.
To be honest, I don’t have a clue if this is good or bad but we have to get rid of this debt. UEFA are wanting all clubs participating in the Champions League not to be in debt and that is what we have to do.
I am sure we will hear a lot more on this story over the next coming days.
