City (possibly) owe the Allams £40m/£50m/£55m? Think of the Mancs (Man.U. that is) who were saddled with a debt of £423m.....YES - £423MILLION!!! Hence their attempt to move towards a flotation on the New York Stock Exchange in the last week, in an attempt to pay back some of that £423m. Tigers are both lucky and blessed!
I still can't understand how the Glazers where able to get away with such a take over. Taking a profitable club with no debts and saddling them with a debt like that. Is it just another example of our financial system ****ing the hard working common man up the arse.
Although you only owe 10% of what Utd do, you must understand that their ability to service that debt far out ways yours, right?
The Glazers raised their loan on the value of Man.U./Old Trafford and used that loan to buy the club. It happens a lot....is it termed 'leveraged buy-out'? Peter Saxton will know, if he's around to comment...
Not really. To service our loan we have to pay the grand total of nothing every year. Man U's holding company on the other hand had to pay 5% on the standard loans, and 14.25% on the PIK loans which rolled over. Obviously when they issued the bond a few years ago they converted all those debts, but the bonds have a return of about 9%. Essentially, just to service their debt they have to generate a profit each year equal to the size of our debt. They didn't saddle the club with the debts. It's the holding company that has the debts. In the most basic way of putting it. They set up a company. The company borrowed a load of money. The company used that money to buy Man Utd. As the company owns Man Utd it can receive divdends the same way people can, it then uses that money to repay it's debts. (It's more complicated than that because there's restrictions about how they get the money out of Man Utd to pay the debts, but you get the idea).
