MUFC was purchased in June 2005 and 14 months later the acquisition debt was refinanced and put on a longer term basis. The refinancing itself cost at least £40m (consisting of debt issue costs written off and early redemption penalties)

MUFC now has £575m of senior debt facilities in place arranged by JP Morgan and also £138m PIK Loan (payment in kind) lent by a variety of hedge funds. The latter loan has interested rolled up (i.e. not paid) and is accruing at 14.25% pa.

The senior debt facilities have a variety of maturities ranging from 2013-2016 although most of the principal of these loans is heavily backed end with repayments mainly in the latter years - i.e. after the end of the current 5 year growth plan at MUFC (2007-2012). This 5 year plan has steep ticket price increases at the core of the revenue growth plan [there was a 12.5% increase across the Board for this season it was forecast that prices would go up 2.5% this summer (actual increases were between 8-14%) and then rise at 5% pa for 4 summers before a "one-time increase of 9.5% for all categories of seats" in the summer or 2012]

The football profit in the last reported figures was £30m but this was before any debt service. After debt service the wider business reported a loss of £138m. Interest of £90m was paid in the year to June 2006. Even after the refinancing, the annual interest to be paid is £60m which is circa 85% of total matchday revenue (and the PIK Loan is not being serviced - this will have reached approximately £350m at maturity in 2017!). New player purchases are funded from within these debt facilities - part of the "speculate to accumulate" philosophy.

UNLESS MUFC ARE SOLD AGAIN IN THE NEAR FUTURE THESE DEBT FACILITIES WILL HAVE TO BE REFINANCED AGAIN AS THERE IS NO WAY THE CURRENT BUSINESS MODEL CAN REPAY THESE LOANS - IT CAN SERVICE THEM (JUST) BUT CANNOT REPAY THEM.

Statement by the Arsenal Supporters Trust:

"The Arsenal Supporters' Trust has studied carefully the financial situation at Manchester United following their takeover by Malcolm Glazer. We are clear that we do not want a similar scenario repeated at Arsenal. The level of borrowing at Manchester United is staggering. It cannot be sustainable for a club to have debts of £660million and to be extracting so much profit for repayments. The borrowing at Arsenal has been sensibly placed against income earning assets such as the Emirates stadium.

"The AST believes that football clubs need stability in their ownership structures. Our preference is for investment by shareholders rather than the taking out of debt. We would judge any possible change in ownership on this criteria. We would not support a takeover that placed the club into severe acquisition led debt".

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