Ronaldo money is going to pay off the debt according to United bankers

http://andersred.blogspot.com/2010/0...e-ronaldo.html

One of the fans’ central accusations (from information in the bond prospectus) is that the vast majority of the proceeds United received from selling Cristiano Ronaldo to Real Madrid were going to be used to repay a chunk of the Glazer family’s toxic “Payment In Kind” (“PIK”) loans. A research report published in the last few days shows this payment is the central assumption of no less than the Glazers’ own bankers, JP Morgan.


“We have £100m in the bank” says David Gill. “It is available to the manager”.


People like me say that the bond prospectus is very clear that £70m will soon be sucked out of the club to pay the Glazers’ own debts (I strongly believe this take place after 31 March so it doesn’t appear in the accounts until August). David Gill says the PIKs "are not the responsibility of Manchester United".


Now the credit (bond) research team at JP Morgan, the lead investment bank on the bond syndicate and the Glazers’ advisers, have published a research note on the bonds. I’ll write more about this note next week, but one stark assumption stands out:


Under all three scenarios [of different performance on the pitch], we assume the £70m carve-out of the restricted payments basket leaves the bondholder group [i.e. is paid out of Red Foottball Ltd to the Glazers’ parent company]. (page 21)


And where is that £70m going? They kindly tell us (my emphasis):


We have adjusted MUFC's balance sheet cash for the £70 RP carveout (Restricted cash). We have given this benefit to the Red Football Joint Venture PIK debt, and have assumed it accrues at 14.25% per annum. (footnote on pages 24, 25, 26)


So if there was any doubt, JP Morgan believe the bulk of the Ronaldo money will be used to pay the PIKs (although they point out, as I have, that the money is currently on United’s balance sheet). I asked David Gill about this subject in my open letter. He declined to reply of course. It’s pretty sad we had to wait for JP Morgan to answer it for him……


Our club has received an incredible windfall from the Ronaldo sale.


Here’s what we could have done with this windfall; we could give Fergie £30m in cash to spend on new players, take the remaining £40m and fund a 20% cut in all ticket prices in the Stretty, scoreboard end, Family Stand and NT3 (annual cost £2m) and guarantee that these ticket price will only rise with inflation for 20 YEARS![i]


At a time when its core working class support is being priced out of going to the match by greedy owners and a recession, that’s the sort of thing a football club would do…..


Tell your mates, tell your family, tell everyone. The Glazers are going to take the Ronnie money and you didn’t hear it from some mad bloke on the net, Manchester United’s bankers said so.

Have we given up on the G&G Forum in here, then??

Originally Posted by red in cumbria

Have we given up on the G&G Forum in here, then??

I'm sure armchair said they can go in the main forum as well and in the past people have been upset when I've posted in sub forums as they like my posts so much. Obviously in this instance I'm just passing along information but still...

news to me

Well I don't know about everyone else here, but I'm shocked.

Shocked.

Originally Posted by forzagarza

I'm sure armchair said they can go in the main forum as well and in the past people have been upset when I've posted in sub forums as they like my posts so much. Obviously in this instance I'm just passing along information but still...

I don't go in the sub forum much at all tbh so if you'd posted this in there, I would have missed it. The main reason I come on here is to hear your pearls of wisdom so I'm glad you posted it in this forum. BTW, I've been meaning to ask, do you have a twitter account?

So did the Glazers lie to Fergie or Fergie lie to us when he said he had the money to spend? I think we all know the answer to that one. Imagine if he'd tied up a deal for a new player and then had to call them and cancel it. Never going to happen, SAF knew all along. It makes you wonder if Ljalic really was too shit for us.

Originally Posted by Spiffy

I don't go in the sub forum much at all tbh so if you'd posted this in there, I would have missed it. The main reason I come on here is to hear your pearls of wisdom so I'm glad you posted it in this forum. BTW, I've been meaning to ask, do you have a twitter account?

I do have a twitter account but I've never actually tweeted. I tend to text people my innermost thoughts. It's for the best- this forum or twitter would be ruined if I put everything on.

I can't quite recall the names of the plonkers on here who actually bought into that "no value in the market" spiel.

Originally Posted by forzagarza

http://andersred.blogspot.com/2010/0...e-ronaldo.html

One of the fans’ central accusations (from information in the bond prospectus) is that the vast majority of the proceeds United received from selling Cristiano Ronaldo to Real Madrid were going to be used to repay a chunk of the Glazer family’s toxic “Payment In Kind” (“PIK”) loans. A research report published in the last few days shows this payment is the central assumption of no less than the Glazers’ own bankers, JP Morgan.


“We have £100m in the bank” says David Gill. “It is available to the manager”.


People like me say that the bond prospectus is very clear that £70m will soon be sucked out of the club to pay the Glazers’ own debts (I strongly believe this take place after 31 March so it doesn’t appear in the accounts until August). David Gill says the PIKs "are not the responsibility of Manchester United".


Now the credit (bond) research team at JP Morgan, the lead investment bank on the bond syndicate and the Glazers’ advisers, have published a research note on the bonds. I’ll write more about this note next week, but one stark assumption stands out:


Under all three scenarios [of different performance on the pitch], we assume the £70m carve-out of the restricted payments basket leaves the bondholder group [i.e. is paid out of Red Foottball Ltd to the Glazers’ parent company]. (page 21)


And where is that £70m going? They kindly tell us (my emphasis):


We have adjusted MUFC's balance sheet cash for the £70 RP carveout (Restricted cash). We have given this benefit to the Red Football Joint Venture PIK debt, and have assumed it accrues at 14.25% per annum. (footnote on pages 24, 25, 26)


So if there was any doubt, JP Morgan believe the bulk of the Ronaldo money will be used to pay the PIKs (although they point out, as I have, that the money is currently on United’s balance sheet). I asked David Gill about this subject in my open letter. He declined to reply of course. It’s pretty sad we had to wait for JP Morgan to answer it for him……


Our club has received an incredible windfall from the Ronaldo sale.


Here’s what we could have done with this windfall; we could give Fergie £30m in cash to spend on new players, take the remaining £40m and fund a 20% cut in all ticket prices in the Stretty, scoreboard end, Family Stand and NT3 (annual cost £2m) and guarantee that these ticket price will only rise with inflation for 20 YEARS![i]


At a time when its core working class support is being priced out of going to the match by greedy owners and a recession, that’s the sort of thing a football club would do…..


Tell your mates, tell your family, tell everyone. The Glazers are going to take the Ronnie money and you didn’t hear it from some mad bloke on the net, Manchester United’s bankers said so.

Trying to think of words that would articulate a sense of impotent rage here.

Originally Posted by Sparky***

I can't quite recall the names of the plonkers on here who actually bought into that "no value in the market" spiel.

Hello

Originally Posted by Pudge_Bear

Hello

Originally Posted by Sparky***

I can't quite recall the names of the plonkers on here who actually bought into that "no value in the market" spiel.

i think it was correct. who do you think was available and represented good value?

that doesn't mean the ronaldo money is sitting there for him to spend, though.

Originally Posted by borsuk

i think it was correct. who do you think was available and represented good value?

that doesn't mean the ronaldo money is sitting there for him to spend, though.

Don't start him off.

Originally Posted by borsuk

i think it was correct. who do you think was available and represented good value?

that doesn't mean the ronaldo money is sitting there for him to spend, though.

Why does anybody have to be readily available and represnt good value?

Were Ferdinand? Rooney? Berbatov? Carrick?

Would you have said any of them were readily available and represented good value?

We got them though.

We usually end up having to spend weeks or even months negiotating and then usually end up spending a figure that is rarely announced as good value?( without hindsight )

Every summer we moan that we have to pay a premium and grudgingly pay it.

Last summer everything changed, now we want value.

Originally Posted by Withers

Why does anybody have to be readily available and represnt good value?

Were Ferdinand? Rooney? Berbatov? Carrick?

Would you have said any of them were readily available and represented good value?

We got them though.

We usually end up having to spend weeks or even months negiotating and then usually end up spending a figure that is rarely announced as good value?( without hindsight )

Every summer we moan that we have to pay a premium and grudgingly pay it.

Last summer everything changed, now we want value.

Agreed.

'No Value' was always an excuse from the club, just like the 'no value after the World Cup' excuse will be used this summer when we don't sign any exciting player.

Originally Posted by Withers

Why does anybody have to be readily available and represnt good value?

Were Ferdinand? Rooney? Berbatov? Carrick?

Would you have said any of them were readily available and represented good value?

We got them though.

We usually end up having to spend weeks or even months negiotating and then usually end up spending a figure that is rarely announced as good value?( without hindsight )

Every summer we moan that we have to pay a premium and grudgingly pay it.

Last summer everything changed, now we want value.

a lot of that i agree with but this is hardly the first summer we've not bought anybody.

i happen to think that

- there was nobody fergie was willing to buy apart from benzema, who wanted madrid

and

- the ronaldo money has all gone to pay off debt

are both true. i also think gill is probably telling the truth when he says money is available. it's just that that money is more £#%&!ing debt.

Originally Posted by borsuk

are both true. i also think gill is probably telling the truth when he says money is available. it's just that that money is more £#%&!ing debt.

I don't get what this means mate. On one hand you're saying there probably is money, and Gill is probably telling the truth, but you also say that United know spending more money is more debt. Isn't that the whole point of it? We can't really spend 'cos of the debt?

I know you're really pro United on everything Borsuk but come on.

Originally Posted by MUFC One Love

I don't get what this means mate. On one hand you're saying there probably is money, and Gill is probably telling the truth, but you also say that United know spending more money is more debt. Isn't that the whole point of it? We can't really spend 'cos of the debt?

I know you're really pro United on everything Borsuk but come on.

The club probably will spend but it'll just be adding debt onto debt. That's entirely possible and probable.

I forget where but there is supposed to be some sort of credit facility available - perhaps detailed in the bond proposal a few months back. If that's the case then that's borrowed money, available, for player purchases that will have to be paid back at some point and somehow.

Originally Posted by Whalefish

The club probably will spend but it'll just be adding debt onto debt. That's entirely possible and probable.

I forget where but there is supposed to be some sort of credit facility available - perhaps detailed in the bond proposal a few months back. If that's the case then that's borrowed money, available, for player purchases that will have to be paid back at some point and somehow.

yep. £75m if i remember correctly. as i said, the club will spend because they can't afford a season like liverpool's, but it's just running up yet another credit bill.