Manchester United fans give guarded welcome to IPO

Manchester United supporters gave a guarded welcome to the club's planned US share sale on Wednesday, warning the move could only be deemed a success if it helped to pay off the Red Devils' massive debts.

United, the most successful club in English football history and reputedly the best supported club in the world, filed papers in the United States on Tuesday for an initial public share offering.

The papers gave a pro-forma amount of $100 million as the target for the share issue, but recent reports about abortive attempts to list it in Hong Kong or Singapore said the owners had aimed to bring in $1 billion.

The team, controlled since 2005 by the Glazer family -- billionaire US sports investors -- has struggled in recent years with debts from the takeover despite posessing arguably the world's strongest global fan base.

United fans have long protested the Glazers' heavily leveraged takeover, arguing the debts loaded onto the club have steadily eroded its ability to compete for top talent in an ever-spiralling transfer market.

United appeared to acknowledge the crippling impact of the club's debt burden in the papers filed in New York.

"Our indebtedness could adversely affect our health and competitive position ... reduce availability of our cash flow to fund the hiring and retention of players and coaching staff," the papers noted.

"We intend to use all of our net proceeds from this offering to reduce our indebtedness."

Duncan Drasdo, chief executive of the Manchester United Supporters' Trust (MUST), welcomed the plan to reduce the club's debt, saying the wording of the filing vindicated the group's long-held concerns.

"If it turns out that the vast majority of the proceeds are used to pay off the debt that is certainly something MUST would welcome and entirely vindicates our longstanding position that their debt was damaging our club," Drasdo said.

"The destination of the funds shows the Glazers have finally conceded this as their filing includes health warnings."

Tensions over United's finances hit a peak in 2010, when the club's liabilities topped one billion pounds ($1.55 billion) and fans rebelled at management, launching protests aimed at denying the club revenues.

But the debts have been slashed in the past two years, and profits have grown despite the team's narrow loss of the Premier League title to cross-town rivals Manchester City this year.

The club's name and fame underpin massive stored value that the owners hope will bring in strong support for the IPO.

The prospectus said that as of March 31, liabilities were down to 606 million pounds and debt was 423 billion pounds, and profits for the nine months to March 31 were 38 million pounds, nearly triple a year earlier.

The listed company would be the newly-created Manchester United Ltd, established in April this year in the tax haven of Cayman Islands.

Manchester United is wholly controlled by Red Football LLC, a Glazer-led company registered in the US state of Delaware, which manages the team through British-incorporated Red Football Shareholder Ltd.

Before the offering goes ahead, Red Football Shareholder will be injected into the Cayman unit, and the business of the team "will be conducted through Manchester United Ltd. and its subsidiaries," the prospectus said.

The listing is unlikely to water down the Glazers' control. According to the prospectus, their Red Football LLC holds 100 percent of class A shares and 100 percent of class B shares in the Cayman unit to be listed.

In the offering, they will sell off some of the A shares while retaining the B shares, which have 10 times the voting rights of the A shares.

MUST chief Drasdo questioned whether the structuring of the sale would be attractive to investors.

"It appears the new A shares on offer will be inferior to the Glazers own B shares as they will carry only 1/10 of the voting rights," he said.

"Furthermore the preliminary filing appears to indicate they will not be paying dividends either.

"A minority shareholding with inferior voting rights and no dividends is going to severely impact on the attraction to both financial and supporter investors."

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • ‘Inland areas could be exposed to tsunami-like waves’
    ‘Inland areas could be exposed to tsunami-like waves’

    While strong earthquakes cause tsunamis in coastal areas, the Philippine Institute of Volcanology and Seismology (Phivolcs) warned that inland areas could also be exposed to tsunami-like waves, or seiche, if located near or around bodies of water. In a recent earthquake awareness seminar in Muntinlupa, Phivolcs supervising science research specialist Joan Salcedo explained that a seiche is a large wave similar to a tsunami, triggered by strong ground shaking from an earthquake or volcanic …

  • China gives ‘gentle reminder’ to Phl, warns small nations
    China gives ‘gentle reminder’ to Phl, warns small nations

    China gave the Philippines a “gentle reminder” last Tuesday that Beijing will not bully small countries but warned these nations not to make trouble willfully and endlessly. “Here is a gentle reminder to the Philippines: China will not bully small countries, meanwhile, small countries shall not make trouble willfully and endlessly. The Chinese Foreign Ministry also said that China would continue to build other civilian facilities on relevant maritime features in the disputed Spratly Islands …

  • Back-channel diplomacy pushed for Phl-China dispute
    Back-channel diplomacy pushed for Phl-China dispute

    The Philippines should consider backchannel diplomacy to prevent its territorial dispute with China from deteriorating further, Sen. Ferdinand Marcos Jr. said yesterday. There are a lot of Filipino businessmen with businesses in China and they have friends and connections there. Let’s utilize that, ask them to talk to their friends on how we can resolve this matter peacefully,” Marcos said. …

  • Phl, Japan to deepen ties amid China sea claims
    Phl, Japan to deepen ties amid China sea claims

    Japan and the Philippines are set to bolster security ties when President Benigno Aquino visits Tokyo next week, the latest move by Prime Minister Shinzo Abe to beef up cooperation with Southeast Asian nations facing China’s growing naval ambitions. The two sides will likely agree to start talks on a framework for the transfer of defense equipment and technology and to discuss a possible pact on the status of Japanese military personnel visiting the Philippines to facilitate joint training and …

  • Phl, Vietnam troops play soccer on disputed isle
    Phl, Vietnam troops play soccer on disputed isle

    Vietnamese and Philippine troops played soccer and sang karaoke on a South China Sea island yesterday in a sign of the growing security ties between the two Southeast Asian nations most at odds with Beijing over the contested waterway. Cooperation has blossomed between Hanoi and Manila since they shelved decades of enmity over their competing claims in the Spratly archipelago to try to counter China, whose creation of artificial islands in the region will allow it to project power deep into …

  • Noy swears in 50 newly appointed AFP officers
    Noy swears in 50 newly appointed AFP officers

    President Aquino administered yesterday the oath taking of 50 newly appointed generals and officers of the Armed Forces of the Philippines (AFP) in a simple ceremony at the Rizal Hall of Malacañang Palace. …

  • Taiwan’s peace call on claimants of disputed territories welcomed
    Taiwan’s peace call on claimants of disputed territories welcomed

    The US on Tuesday welcomed Taiwan’s call on all claimants to disputed shoals, reefs, rocks and islets in the South China Sea and West Philippine Sea to exercise restraint, refrain from unilateral actions that could escalate tensions, as well as to respect international law as reflected in the United Nations Convention on the Law of the Sea. “With regard to the maritime claims and the claims to sovereignty over land features in the South China Sea, our position is that maritime claims must …

  • Metro-wide quake drill set on July 30
    Metro-wide quake drill set on July 30

    A metro-wide earthquake drill will be held on July 30 as part of the government’s preparations for a possible 7.2 magnitude tremor, the Metropolitan Manila Development Authority (MMDA) said yesterday. All private and government offices as well as businesses, including shopping malls would be closed between 3 p.m. and 8 p.m. to simulate the scenario of a 7.2 magnitude earthquake. The Philippine Institute of Volcanology and Seismology has warned that an earthquake of that magnitude could occur …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options