Manchester United planning $1bn share sale in Singapore
Published 17/08/2011 | 05:00
MANCHESTER United are planning a $1bn (€694m) initial public offering (IPO) in Singapore which could see the owners, the Glazer family, put 25pc of the club up for sale. The club is seeking to cut the level of debt that has fuelled protests by fans against the American owners, the Glazer family.
Credit Suisse Group AG is working on the transaction, which may take place this year, said the sources, who declined to be identified.
United, the current Premier League champions, were considering Hong Kong for the IPO but now favour Singapore, although no final decision has been made.
Phil Townsend, spokesman for the club, refused to comment on the speculation, as did Credit Suisse spokeswoman Vanessa Neill.
United have spent the past few months examining ways to reduce financing costs and raise money that could be used to expand the business. They also want to acquire players that can help fend off the challenge of clubs including Manchester City, owned by Sheikh Mansour bin Zayed Al Nahyan, and Chelsea, owned by Russian billionaire Roman Abramovich.
Fans have protested against the club's owners, the Glazer family, even though United have picked up four league titles and a European Cup since they bought the club in 2005.
United spend about £45m a year to service a £500m bond. The bond, which matures in 2017, replaced bank debt that had been required for the purchase. Fans have complained that this money should be used to buy players and reduce ticket prices.
In March, the club's parent company, Red Football Joint Venture Ltd, announced a record £104.7m fiscal-year loss. It said this was due to costs related to swapping a long-term bank loan for the dollar and sterling bond last year and on lower income from player sales.
The Glazers, who also own the National Football League's Tampa Bay Buccaneers, bought United for £790m.
'Forbes Magazine' estimates that the club is now worth £1.1bn, putting it third behind Real Madrid and Barcelona in Deloitte LLP's list of the richest soccer clubs by revenue.
As well as the £500m loan secured against the team, the ownership also had a £220m payment-in-kind loan that accrued interest of as much as 16.3pc.
The owners paid off the lenders in November, although neither the club nor the Glazers have said how the loan was repaid.
The Glazers' commercial operation, led by former JP Morgan banker Edward Woodward, has secured global sponsorship and licensing agreements that have led to annual revenue doubling to about £300m in six years.
The club chose Asia for its IPO because of its popularity in the region, said one of the sources.
It has fan clubs in countries such as Thailand and South Korea and a supporter base there of 190 million.
"The multitude of local events we run with global and local partners, and a prospective forthcoming tour of Asia in 2012, necessitate expanding our footprint both with people and office space," United said.