Stefan Borson drops ‘surprise’ Man City ownership update after documents filed
Manchester City’s majority owner Sheikh Mansour has increased his shareholding in the club’s parent company following a £420million injection.
That is the view of former Man City financial adviser Stefan Borson, who exclusively told Football Insider it is a “surprise” to see the investment came from Mansour.
City Football Group (CFG) issued a total of £420million A Preference Shares in June and November last year.
It was believed Silver Lake, which initially bought a 10 per cent stake in CFG in 2019 before later increasing its shareholding to 18.1 per cent, was the party behind the investment after it was previously the only shareholder with A Preference Shares.
But a Companies House submission on 23 January revealed Mansour’s vehicle Newton Investment and Development made the £420million injection.
Man City owner Sheikh Mansour has increased his stake
Borson revealed the vice president of the UAE has now taken his stake in CFG to over 80 per cent, while Silver Lake’s shareholding is worth between 16-17 per cent.
“It is a surprise that it’s come from Sheikh Mansour’s vehicle,” Borson told Football Insider.
“The reason that we thought it was going to be Silver Lake was because of the equity instrument that was used. It was a preference share.
“Historically, the only holder of preference shares was Silver Lake. The theory was that preference shares are the instrument that are issued only to Silver Lake.
“Therefore, if there has been a fundraising and an issue of preference shares, which pay a small coupon to the holders, so in addition to the other rights to what the shares have, they also get some payment.
“The theory was they had gone to Silver Lake for around about £420million over the year they had been invested, but actually, it now transpires that Sheikh Mansour’s vehicle invested that £420million.
“I think the £420million is going to be used for a combination of stadium builds, both in New York and Manchester, and also for working capital for the rest of the group because it is a loss-making group across the board as it tries to build up its portfolio of clubs.
“It’s not a big surprise that they are spending quite a lot of cash, but what that means because Sheikh Mansour has put the money in is it will be diluting Silver Lake.
“Sheikh Mansour is now back over 80 per cent and Silver Lake are reduced to something like 16-17 per cent.
“The valuation was about £5.5billion for the group, which is obviously a very high valuation, so Silver Lake probably won’t be that disheartened by their dilution because it’s happened at a very high valuation.
“But we will have to see over time whether it means anything more significant.”
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