by Ciggy » Tue Jun 07, 2005 1:09 pm
MALCOLM GLAZER could leave ManchesterUnited with staggering debts of £1.55BILLION after his takeover.
the American tycoon's proposals, which reveal huge penalties if he fails to pay back on time the massive £645m he has borrowed.
Glazer has taken on the huge debts after paying £3-a-share to take United off the stock market.
And Nick Towle, chairman of action group Shareholders United, said: "Glazer isn't so much tied up with loan sharks — he's got himself involved with a plague of locusts!
"United chairman Sir Roy Gardner resigned saying Glazer had provided no assurances about future debt levels, transfer funds, non-interference in team selection and so on. Now we see the true horror of it all."
Glazer has borrowed £275m from American hedge funds, which specialise in lending money to risky ventures at high rates of interest.
And there are big penalties if he fails to pay back on time. Towle said: "The total debt could easily reach £1.55bn if Glazer does not hit all his repayment targets.
"That's the big fear for all supporters.
"Glazer has already paid £100m more for United than most experts said it was worth — and now he faces another hidden £105m dealing with the hedge funds alone."
Interest
Glazer has also borrowed £265m from JP Morgan and the interest rises to a staggering 20.1 per cent — or £55m — in 2009.
Football finance expert Simon Banks said: "The takeover documents show incredible borrowing. Hedge funds here, £55m there, a £50m credit facility and £40m allowed for capital expenditure.
"It seems that when United told Glazer to put up or shut up they did so after looking at the international finance market.
"They never imagined he'd borrow so much at such high rates of interest. In turn, Glazer was stuck with all the shares he bought up at £3 a go and had to come up with something.
"He has been forced into extremely high risk areas."
Incredibly, United could accumulate staggering debt of £1.65 BILLION if it all goes horribly wrong for Glazer and he fails to redeem the preferential shares sold to high risk hedge funds for £275m.
Other figures show that the potentially crippling repayment schedule on loans totalling £644m mean that:
* Sir Alex Ferguson could have £25m to spend on players this summer-but after that the cupboard is bare.
* By next May alone the cost of redeeming the staggering £275m worth of preferred securities obtained from three hedge funds could cost the club £105m.
* The cost of repaying the £265m borrowed from J P Morgan will have rocketed to £55m year by 2009.
And all this from a club that this year announced pre-tax profits of just £27.9m after paying dividends of £7m to shareholders.
None of this information was contained in the takeover proposal plan sent to shareholders last week. But closer examination of Glazer's plan have emerged after scrutiny of crucial documents at the London office's of his lawyers Allen & Overy.
The problem with Glazer's hedge fund arrangment is that it will cost him as much as £60m to redeem the preferential shares and another £55m of rolled up interest if, as expected, he moves to reduce this debt after May 2 of next year.
And while repayments to J P Morgan begin with two seperate cheques of £8m in January and July 2006, the percentage of the debt repayment rises to a mighty 20.1 per cent in 2009. The amount increases each year, so by 2009 they'll be paying back a massive £55m a year.
All of which will leave Ferguson with no money in the tranfer kitty after this summer. And should Sir Alex call it a day in a year's time the new Old Trafford boss will be forced to sell before he can buy.
"It's crazy and increases our fears that he may sell and lease back Old Trafford to buy back the preference shares."
Fans are certain to vent their fury at that prospect at a public rally at the Apollo Theatre in Ardwick tomorrow afternoon.
There is no-one anywhere in the world at any stage who is any bigger or any better than this football club.
Kenny Dalglish 1/2/2011
REST IN PEACE PHIL, YOU WILL NEVER BE FORGOTTEN.
are they going to pay any of this back? 
by 116-1065305004 » Sun Dec 21, 2003 1:45 am