Manchester City’s parent company has raised $ 650million in one of football’s biggest-ever debt deals, as it looks to step up investments in its international network of football clubs.
City Football Group, the Abu Dhabi-controlled holding company that owns the English Premier League champions alongside clubs in the United States, Australia and India, recently raised the loan, which will expire in July 2028, according to several. people familiar with the transaction.
The debt deal exceeds the € 525million debt refinancing deal between Goldman Sachs and Spain’s FC Barcelona agreed in June, and roughly matches England’s Tottenham Hotspur, who borrowed £ 637million in 2019 to a number of banks to build its new stadium.
CFG intends to use the money to fund infrastructure projects such as a new stadium for its Major League Soccer franchise, New York City FC, which has been hinted at for years but still requires approval. local authorities.
But the group has shown an appetite for rapid growth, having either taken full ownership or bought minority shares in 10 clubs around the world over the past decade.
The seven-year loan was taken out by Barclays, with HSBC and KKR Capital Markets helping to organize and distribute the debt, according to people familiar with the deal.
Separately, CFG also arranged a revolving credit facility worth £ 100million with the same backers, although a person close to the group said they had no immediate intention to pull on ease.
CFG declined to comment. People close to the deal said its executives opted for increased debt, believing it to be a cheaper way to get cash than selling more shares.
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CFG sold a 10% stake to US private equity firm Silver Lake Partners for $ 500 million two years ago, which valued the group at $ 4.8 billion, then a record valuation for a group. athletic. Another 12 percent is owned by China Media Capital, a venture capital group.
The majority owner is Sheikh Mansour bin Zayed al-Nahyan, a billionaire member of the ruling Abu Dhabi family, who bought Manchester City in 2008.
He spent around £ 1bn to transform the club from an also racing team into one of the most successful teams in English football.
Critics have suggested that such spending has distorted competition in England and Europe, while human rights activists say it is part of a ‘sports wash’ scheme designed to clean up the global image of United Arab Emirates. Sheikh Mansour’s brother is Sheikh Khalifa bin Zayed al-Nahyan, the de facto ruler of the Gulf nation.
The new debt agreement ties the group tightly to Western financial institutions. A year after Silver Lake’s investment in CFG, it secured $ 2 billion from Mubadala, Abu Dhabi’s sovereign wealth fund headed by Khaldoon al-Mubarak, also president of Manchester City.
The money will help support the deficit group whose finances have been hit hard by the pandemic.
CFG’s annual revenue fell to £ 544million in the fiscal year ended June 2020, down almost 14% year-on-year due to the loss of ticket and broadcast revenue. The group’s annual net loss widened to £ 205million, from £ 84million a season earlier.
Manchester City’s revenues have fallen to £ 478million in the 2019-20 season, from £ 535million the year before. The club recorded a net loss of £ 126million from a net profit of £ 10million. It was previously the only for-profit club in CFG’s global network.