Manchester United chief executive David Gill has spoken for the
first time about the "potential" in floating shares on the
Singapore Stock Exchange with the Glazers seemingly now valuing the
club at a staggering £2.57 billion.
The Glazers paid £790 million to buy Manchester United -
although the final bill amounted to £850 million including the
legal and advisory costs - and they recently rejected offers of
£1.5 billion from China and Qatar as, it is now clear, they fell
well short of their valuation.
The Glazers are seemingly planning to float 25% of Manchester
United on the Singapore Stock Exchange at a value of $1 billion
(£643 million), which would value Manchester United at £2.57
billion. If the shares are sold, they could carry voting powers of
only 12%, which would fall well below the 25% threshold that allows
shareholders to contest decision-making.
"It's a potential," Gill told the Sunday Telegraph. "I
think the finances of the club are in robust health in terms of the
bond interest against the EBITDA [earnings before interest, taxes,
depreciation, and amortization] that we do have, so in that respect
I am not concerned.
"But it was an opportunity, and is a potential opportunity, to
strengthen them even further. If the proceeds were by and large
used to pay down the bond debt then that would take some of the
interest costs out."
The Glazers' advisory team - including Morgan Stanley, JP
Morgan, and Credit Suisse - will inform the owners when the time is
right to press ahead with the plans and, given the parlous state of
the global economy at present, it appears they will have to
wait.
"It is not officially on hold but the owners will be taking
appropriate advice from the advisors and determining what the
markets are telling us," Gill added. "But I don't think it's the
level of the market - it is the sheer volatility. That's the
challenge."
Although United recently posted an operating profit of £110.9
million for the past financial year, paying down the bond debt
would free up greater funds for investment into the squad. Gill,
though, denies Sir Alex Ferguson has been significantly
hindered.
"It [the debt] hasn't been a problem," Gill, who was in Senegal
to support a UNICEF initiative, said. "There have been a lot of
comments and a lot of criticism. On the one hand, you argue clearly
our interest costs have gone up now as a limited company, but it is
not 45 to 0 because as a listed company we had corporation tax
payments, we had dividend payments.
"The owners have never been anything other than 100% supportive
on delivering to Alex or me the players we need to keep ourselves
going, but people don't believe us.
"If you look at it, we are spending £13 million revamping
Carrington [the training ground] and we have just completed this
summer at Old Trafford our box redevelopment. There has never been
any money that we have needed to develop the club that hasn't come
forward."
