The mancityfans.net football forum

iwasthere2012 wrote:

Slim wrote:Manchester City have a debt of £67M?

I love the way Mangala is referred to as a "flop", but Di Maria is a "marquee signing".

I know I shouldn't even ask, but I was was wondering about that. Where would they even make that up from?

Peter Doherty (AGAIG) wrote:

Slim wrote:Manchester City have a debt of £67M?

We owe it to the council.

FINANCE LEASE ON ETIHAD STADIUM
On 5 August 2003 Maine Road was exchanged for a 250 year leasehold interest in the Etihad Stadium. Rental payments are made quarterly. The lease has been treated as a finance lease, with the lease premium and the net present value of future rental obligations capitalised.

A finance lease creditor equal to the future obligations under the lease has been established. In calculating the future obligations an interest rate of 7.57% and an estimated long term inflation rate of 2.5% have been applied. This reflects the discount rate previously applied to the finance lease before the amendment as the directors consider this reflects the rate at which they could borrow from a third party.

The finance lease liability was initially established at £34,903,000. In the year ended 31 May 2013 the lease was renegotiated with Manchester City Council and certain terms were amended. As a result fixed asset additions of £29,257,000 were recognised to reflect the capital enhancement of the stadium asset, the revaluation reserve was reduced by £29,257,000 to ensure the total value of the stadium asset following the additions did not exceed the 2013 GVA Grimley valuation. This resulted in an amended initial finance lease liability of £67,614,000.

Dameerto wrote:

Peter Doherty (AGAIG) wrote:

Slim wrote:Manchester City have a debt of £67M?

We owe it to the council.

FINANCE LEASE ON ETIHAD STADIUM
On 5 August 2003 Maine Road was exchanged for a 250 year leasehold interest in the Etihad Stadium. Rental payments are made quarterly. The lease has been treated as a finance lease, with the lease premium and the net present value of future rental obligations capitalised.

A finance lease creditor equal to the future obligations under the lease has been established. In calculating the future obligations an interest rate of 7.57% and an estimated long term inflation rate of 2.5% have been applied. This reflects the discount rate previously applied to the finance lease before the amendment as the directors consider this reflects the rate at which they could borrow from a third party.

The finance lease liability was initially established at £34,903,000. In the year ended 31 May 2013 the lease was renegotiated with Manchester City Council and certain terms were amended. As a result fixed asset additions of £29,257,000 were recognised to reflect the capital enhancement of the stadium asset, the revaluation reserve was reduced by £29,257,000 to ensure the total value of the stadium asset following the additions did not exceed the 2013 GVA Grimley valuation. This resulted in an amended initial finance lease liability of £67,614,000.

Cheers for that - it sure puts things in perspective. I'd call it more of an obligation than a debt (from my unqualified layman's view).
We can look forward to all the axe-to-grind tosspot journos using it against us every year when trying to justify the RAGs and others.