Man United looking to raise £500 million to refinance debt
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Despite the record transfer of Christiano Ronaldo, Manchester United has announced it plans to raise 500 million pounds in order to refinance their debts. The English Premier League champions also reported a pre-tax profit of 48.2 million pounds.
AFP - Only Cristiano Ronaldo's world record transfer prevented Manchester United making an annual loss of more than 30 million pounds, figures released by the English Premier League champions showed Monday.
United declared a pre-tax profit of 48.2 million pounds (77.7 million dollars, 53.6 million euros) for the year up to June 30, 2009.
But without the departure of Portugal winger Ronaldo, sold to Spanish giants Real Madrid for 80 million pounds (129 million dollars, 90 million euros), the Old Trafford club would have been reporting a a loss of 31.8 million pounds.
The club's figure also showed they had paid 41.9 million pounds in interest on a huge loan of 509.5 million pounds.
Turnover was up to 278.5 million pounds from 256.2 million a year ago.
United's figures were released at the same time as the club announced plans to refinance their debts by raising 500 million pounds through a bond issue.
Many supporters groups were concerned by the huge amount of debt the club were saddled with as a result of the takeover by United's current owners, the US-based Glazer family, in 2005 and Monday's move is an attempt to rebalance United's finances.
"Manchester United today announced that it will be seeking to raise approximately 500 million pounds aggregate principal amount from an offering of senior secured notes due 2017," a United statement said Monday.
"The notes, whose proceeds will be used to refinance existing debt secured against the club, will be issued by MU Finance plc.
United's aim is to raise some 500 million pounds from its investors.
The incentive for investors is that they will in turn receive an attractive rate of interest over seven years in addition to getting their initial investment back from United.
Last week United manager Sir Alex Ferguson moved to quell fans' fears that the club's debts were preventing him from signing new players with the Scot insisting the decision not to spend three-quarters of the money received for Ronaldo was his alone.
"I don't have any concerns about the financial situation," he said. "There is absolutely no issue at all. I am really confident about that.
"Concerns of the supporters are down to the fact that I haven't moved in the transfer market.
"But that is nothing to do with the Glazers or with David Gill (United's chief executive). It is simply because I am not going to pay 50 million pounds for a striker who is not worth it."
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