Thursday, 9 December 2010

PIK repayment: The Glazers issue shares to someone (or maybe themselves)....


Two of the Glazers' UK holding companies; Red Football Joint Venture Ltd (the company which owed the PIKs) and Red Football Shareholder Ltd (its parent) filed documents with Companies House today. The two identical documents are dated 22nd November 2010 (the day the PIKs were repaid) and are records of Ordinary Resolutions of each company authorising them to:

"....allot ordinary shares in the Company or grant rights to subscribe for, or convert any security into, ordinary shares in the Company...."

That means the companies are now authorised to issue new shares (or rights to subscribe for or buy new shares).

You can download the documents here for RFJV and here for RFS (if you really want).

So what's going on?

Well all we know for certain from this is that in order to pay off the PIKs, the Glazers are issuing more equity (or rights to equity) in one or both of United's parent companies. The mystery of course is who they are issuing such equity to.

It could of course be themselves. If they have found the £243m needed to repay the PIKs down the back of a sofa in one of their many Florida properties, they could be subscribing for more shares themselves using that money. Or it could be a third party who has provided finance to repay the PIKs (i.e. new debt for old).

Will we ever know? It's hard to say, as it depends on the exact structure used in any refinancing and whether it took place in the US or UK.

There will be a "post balance sheet event" note in the RFJV and RFS accounts when they are published in the new year. That may tell us more.

Watch this space.

LUHG

12 comments:

Anonymous said...

Anders,

"Will we ever know? It's hard to say, as it depends on the exact structure used in any refinancing and whether it took place in the US or UK."

In the US, I think that UCC articles 8 and 9 refer to the ways that various securities can be perfected in a legal sense. Equity securities, like a share pledge, offered to lenders in loan agreements are generally deemed to be intangible securities and 'perfection' requires the filing of financing statements with the relevant(where the borrower is incoporated) Sec. of state. This info is publically available and can be accessed via the state department's website in many cases.
Probably a very long shot though as it is possible that such securities can be framed under article 8 and 'perfection' would occur merely by ownership\transfer of the securuty agreement.

andersred said...

Thanks Anonymous,

In the past I've attempted to find relevant UCC filing statements for the Glazers' Nevada companies. In keeping with that state's reputation for company secrecy it is virtually impossible. The relevant website is:

http://nvsos.gov/

Lovely photo of Ross Miller.

If anyone out there knows their way around Nevada state filings, please get in touch.

anders

Diem said...

"new debt for old"
Well, we're in a slightly better position since technically (and legally) it's equity, rather than debt, and so less of a problem hanging over us.

Do we know anywhere how much the shares are currently valued at, to be able to estimate what sort of proportion of the total the £243 would be?

Interesting that they decided they wanted to be able to issue shares in *both* the companies too...

Finally, since these companies are in the UK, are there any rules around disclosure of who buys the shares? I know there would be for a listed entity, just not about private (other than presumably at year-end).

Diem

Anonymous said...

Hi Anders
Anon at 15:21 here. You can do a search of UCC filings online at the above site. You need to log in\create an account; this is a formality (no charge) and you should gain immediate access.

http://nvsos.gov/index.aspx?page=7
is the link to UCC filings. "Online filings and searches" will get you there (after you log in). Use the corporation database to get exact entity names if needed.
The site is under maintenance at the moment- just checked. You will have to wait a while and admire the delectable Ross Miller!

There are 3 active 'Red football' entities listed. I ran a search against each a week ago. No (new or old) UCC filings.
As I said, it's probably a long shot that anything material will emerge.
A big problem is that the Glazers are incorporated all over the shop. Searches in some states need to be conducted through an approved
agency and require a fee.
Florida UCC filings have been outsourced -but you can get a link
via the state department website. I chased down filings against the Buccs' holding company recently but found nada.
I am not sure where FAC is incorporated. I get conflicting info from online searches. NY and Cal. both require searches through approved agencies.
There is an active 'Red football limited' registered in Delaware. Delaware's Sec. of State website doesn't provide any more information. It could be a completely unrelated entity. Any ideas?


Regards

Anonymous said...

Anders

(I think your spam filter is acting up again... so another go)

........


Anon at 15:21 here. You can do a search of UCC filings online at the above site. You need to log in\create an account; this is a formality (no charge) and you should gain immediate access.

http://nvsos.gov/index.aspx?page=7
is the link to UCC filings. "Online filings and searches" will get you there (after you log in). Use the corporation database to get exact entity names if needed.
The site is under maintenance at the moment- just checked. You will have to wait a while and admire the delectable Ross Miller!

There are 3 active 'Red football' entities listed. I ran a search against each a week ago. No (new or old) UCC filings.
As I said, it's probably a long shot that anything material will emerge.
A big problem is that the Glazers are incorporated all over the shop. Searches in some states need to be conducted through an approved
agency and require a fee.
Florida UCC filings have been outsourced -but you can get a link
via the state department website. I chased down filings against the Buccs' holding company recently but found nada.
I am not sure where FAC is incorporated. I get conflicting info from online searches. NY and Cal. both require searches through approved agencies.
There is an active 'Red football limited' registered in Delaware. Delaware's Sec. of State website doesn't provide any more information. It could be a completely unrelated entity. Any ideas?


Regards

andersred said...

Apologies for the spam filter and thanks for the advice. I have a complete list of Glazer corporations in Nevada somewhere which I'll dig out. Am flying to NYC now so am going offline.

anders

LSD_Einhhoven said...

Hi Anders

I think your spam filter is killing the contributions of the friendly Anon at 15:21.

Wink.

LSD

Sweeney Todd said...

In October, The Daily Telegraph suggested that Springfield Financial had provided the funding for the Glazers to settle the PIK notes (http://www.telegraph.co.uk/finance/comment/citydiary/8141369/Manchester-United-gets-Springfield-cash.html).

Could it be that shares in RFJV and RFS have been Issued as a means of providing a guarantee? Was this not how their subsidiary, Mill Financial, funded Hicks and Gillett which resulted in them taking over Gillets share of that club when he defaulted?

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With this what is the exact amount that is due from our debts/

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