The Glazer family have issued a notice of intent to sell just over 10 per cent of Manchester United on the New York Stock Exchange (NYSE) which was announced last night and confirms an intention to raise around 300million US dollars.
However, there does appear to have been a significant shift in how the proceeds will be used, it was suggested that the entire sum would be used to pay off Manchester United’s massive debt, that currently stands at over £420m.
The prospectus that was released on Monday night indicates that only half the money will be used to clear the debt that hangs over the club, with the rest going directly to the family.
The news comes on the day United confirmed a massive new shirt sponsorship deal with US car giant Chevrolet, which takes effect from 2014, However, critics will also point to the fact the club are yet to post end-of-year accounts which show the exact amount bowing out of the Champions League group stage cost them.
A statement issued from New York by Sard Verbinnen & Co, the public relations firm enlisted by United for the IPO said:
“Manchester United today commenced its initial public offering of 16,666,667 Class A Ordinary Shares,”
“Manchester United is offering 8,333,334 Class A Ordinary Shares and the selling shareholder is offering 8,333,333 Class A Ordinary Shares.
“The underwriters have an option to purchase up to an additional 2,500,000 Class A Ordinary Shares from the selling shareholder. The Class A Ordinary Shares will be listed on the New York Stock Exchange and will trade under the symbol “MANU.”
We spoke to Andy Green last week regarding the IPO, he had this to say on;
Does this attempted IPO suggest the Glazers are having money troubles?
This is the big unanswered question. Why are they so very, very keen to do this IPO in the face of tough economic conditions? One theory is that they are struggling financially and that they borrowed to repay the PIKs in November 2010. Paying off the PIKs cost $400m and it could well be that that new borrowing has conditions attached to it about the total debt the club has (what are called financial “covenants”). It would go a long way to explain this pretty sad scramble to raise money in first one market and then another….