LONDON, May 27 (LPC) – Premier League football club Manchester United has drawn £ 140million on its £ 150million (US $ 184.34million) syndicated revolving credit facility (RCF), which could potentially be used to finance player acquisitions, after the club’s operating cash flow. flows have been affected by the Covid-19 crisis.
Government restrictions have seen all top football matches in the UK suspended since mid-March, which has had a huge impact on broadcast revenue and match days. Based on government guidelines and agreed medical protocols, gambling is expected to resume in June.
Manchester United have said they have withdrawn funds from RCF as a precaution to increase their cash flow, preserve financial flexibility and maintain liquidity during the crisis.
The secured RCF, which expires in April 2025, yields a margin ranging from 125bp to 175bp on Libor / Euribor, depending on leverage.
Bank of America is the revolver’s facilities officer and safety trustee.
Historically, the RCF has not been fired during the summer transfer window, but if the club were looking to buy players whose value is significantly higher than the players sold, they could use the money from the installation. to meet their needs.
Manchester United’s main cash flow requirements come from payment of transfer fees, capital expenditure for the improvement of Old Trafford facilities and the club’s training complex, payment of interest on loans, social charges and the payment of dividends.
These expenses are normally covered by a combination of cash flow from operations and the proceeds of transfer fees.
Despite the crisis, Manchester United will pay a cash dividend of US $ 0.09 per share on June 3.
The club also holds $ 425 million of senior secured bonds due June 2027 and a US $ 225 million secured term loan facility due August 2029 ($ 1 = £ 0.8137 ) (Edited by Christopher Mangham)