Manchester City boss raised $650 million in one of football’s largest debt transactions

Manchester City’s parent company raised $650 million in one of the largest debt transactions in football history to seek to increase investment in its network of international football clubs.

City Football Group is a holding company of Abu Dhabi Holdings, which owns Premier League Champions According to several people familiar with the matter, along with clubs in the United States, Australia and India, the loan has recently been increased, and the loan will expire in July 2028.

This debt transaction surpassed the 525 million euro debt refinancing arrangement reached between Goldman Sachs and Spain’s Barcelona Football Club in June, roughly equivalent to the level of England’s Tottenham Hotspur, which borrowed 637 million from multiple banks in 2019 Pound to build a new stadium.

CFG intends to use the money to fund infrastructure projects, such as the construction of a new stadium for its Major League Soccer team, the New York City Football Club. The project has been discussed for many years but still needs to be approved by local authorities.

But the group has shown interest in rapid growth. In the past ten years, they have either wholly owned or bought minority shares in 10 clubs around the world.

According to people familiar with the matter, the seven-year loan was underwritten by Barclays Bank, and HSBC and KKR Capital Markets helped arrange and allocate debt.

In addition, CFG also organized a £100 million revolving credit facility with the same financing provider, but a person close to the group stated that it has no intention of using the loan immediately.

CFG declined to comment. People close to the transaction said that its executives have chosen to borrow, believing that this is a cheaper way to cash out than selling more equity.

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CFG Sold 10% of the shares Two years ago, it acquired the US private equity firm Silver Lake Partners for US$500 million. At that time, the group was valued at US$4.8 billion-a record valuation of a sports group at the time. The other 12% of the shares are owned by venture capital group Huawen Media.

The majority shareholder is Sheikh Mansour bin Zayed al-Nahyan, the billionaire of Abu Dhabi’s ruling family, who bought Manchester City in 2008.

He has spent about £1 billion to turn the club from a person who can’t run away into one of them. The most successful side In soccer.

Critics say such spending distorts competition between England and Europe, while human rights activists say it is part of a “sports baptism” project aimed at cleaning up the United Arab Emirates’ global image. Sheikh Mansour’s brother is Sheikh Khalifa bin Zayed Nahyan, the de facto ruler of the Gulf countries.

The new debt transaction closely links the group with Western financial institutions. One year after Silver Lake invested in CFG, Get 2 billion US dollars Mubadala is the sovereign wealth fund of Abu Dhabi, operated by Khaldoon al-Mubarak, chairman of Manchester City.

This money will help support loss-making groups whose finances have been hit hard by the pandemic.

In the fiscal year ending in June 2020, CFG’s annual revenue fell to 544 million pounds, a decrease of nearly 14% year-on-year due to reduced ticket and broadcasting revenue. The group’s annual net loss expanded from 84 million pounds a season ago to 205 million pounds.

Manchester City’s revenue fell to 478 million pounds in the 2019-2020 season, down from 535 million pounds in the previous year. The club switched from a net profit of 10 million pounds to a net loss of 126 million pounds. It used to be the only profitable club in the CFG global network.

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