Manchester United’s annual report has revealed three new loans made by the club that have left the Old Trafford outfit perilously close to its credit limit.
Erik ten Hag’s squad was strengthened in the summer with the arrivals of Rasmus Hojlund, Mason Mount, Andre Onana, Altay Bayindir, Sofyan Amrabat and Sergio Reguilon, the latter two on loan.
The total transfer and loan fees involved were €204.4 million.
Player sales amounted to €55.4 million, meaning there was a net spend of €145 million, around £127 million pounds sterling at the current exchange rate.
As highlighted by football finance expert Kieran Maguire, the recently published annual report shows that the net spend was funded entirely by new loans.
Since the 30 June year end Manchester United borrowed £50m on 3 July, £50m on 3 August and £60m on 10 October. This takes total gross debt to £773 million. #MUFC #Glazernomics pic.twitter.com/P15iF2cYKl
— Kieran Maguire (@KieranMaguire) October 28, 2023
The report shows that loans totalling £130 million, comprising £50 million in July, £45 million in August and £35 million in October, were taken out.
These loans have increased the club’s overall debt to a whopping £773 million.
Even more concerning is that the new loans have left United just £40 million remaining in their revolving credit facilities.
These are pre-agreed credit facilities from the Bank of America and Santander of a total of £300 million, essentially equivalent to the club’s credit card limit. £260 million of that £300m credit facility has now been spent.
What is unclear at this stage is whether the Glazers would be able to secure any other type of loan elsewhere once their revolving credit line is exhausted.
If not, they are essentially close to being “maxed out”, which in turn would mean there would be zero transfer budget available for Ten Hag until the club is sold or refinanced in some way.
It remains to be seen whether the potential investment into the club by Sir Jim Ratcliffe of some £1.3bn will go ahead and if so, how much of that will be put into the football coffers to allow transfer business to continue and how much, if any, will be used to reduce the debt.