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Manchester United have released their latest account filings to the SEC (Securities and Exchange Commission), something they are bound to do because of their publicly-listed status on the New York Stock Exchange.
The SEC filings regularly paint a grim picture of United’s finances under the Glazers and become a source of heavy news.
It was going to be the case this time as well and even more so, because Sir Jim Ratcliffe’s initial investment would be reflected in it.
From the filings, it can be revealed that Sir Jim’s initial investment into the club is being majorly used to pay off bank loans accrued by the Glazers.
To give some background to the figures involved, Sir Jim paid nearly £1.2 billion to get the Class A shares needed to get him a seat on the board.
This money went directly to the Glazers but in addition, Sir Jim also committed around £237 million for the club directly.
This sum would come to United in two instalments- £158 million was given to the club as soon as Sir Jim was officially confirmed as the owner, with the rest arriving by the end of 2024.
The SEC filings show that £158 million, which United received upon his confirmation as the owner, was majorly used to pay off a bank loan amounting to £120 million.
Glazers took a revolving credit facility to the tune of £300 million in the last few years to finance the transfers because, as every United fan knows, they are allergic to spending their own money for the club that has made them billions.
This resulted in United’s financial position getting even weaker as debt increased. After this £120 million payment, the total drawdown on this credit facility is now £140 million.
That means United can spend more using this revolving credit facility without going into the red and in a volatile financial position.
Counting this facility under debt, it also means that United’s debt levels are down from about £773 million to £653 million, not including transfer fees owed.
Overall, Sir Jim’s money, which was supposed to be used for infrastructure development, has been used as a bandage to stop a glaring leak first.
United can still borrow at lower rates (terms on a revolving credit facility are much harsher) due to the lowering of debt but the damage repair Sir Jim’s money will have to do in the next few years is humongous.
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