Everyone and their uncle know that the Singapore Exchange (SGX) has been desperately trying to lure overseas companies to list in Singapore. In their desperation for foreign money, there have been some strange listings in recent years.
Now one only need to remember the many scandals of Chinese companies in recent years to know that listing rules on the SGX are somewhat lax but I found the coming listing of Manchester United on the SGX the strangest listing of all. Manchester United is a world famous football club in the UK and yet their planned US$1 billion ($1.24 billion) IPO (initial public offering) is in Singapore?
That’s strange no matter how you look at it.
According to media reports, the listing will be sometime next month but you can only buy non-voting preference shares and the share structure will be set-up in a way that will ensure the Glazer family retains control of the club. No doubt there will be some Manchester United fans who will buy the shares for sentimental value but I have to ask why the SGX is allowing this? To me, the listing is a bad idea.
Manchester United may be famous but it is a club 460 million pounds in debt and its ability to pay off that debt depend a lot on its success in the competitive English Premier League (EPL) and Champions League. Yet the SGX is allowing such a club to be listed on the local bourse? Would the SGX allow any company over 400 million pound in debt to be listed? The answer is a clear “No” so why should this case be any different?
A closer look at the IPO however and you can guess why the club is listing in Singapore. No wonder Singapore beat Hong Kong in getting the club to list here. It is probably listing here because no other bourse wants them!
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