By Andy Sambidge
Premier League club also says Abu Dhabi owner purchases further shares worth $143m.
Premier League club Manchester City said on Wednesday that Abu Dhabi owner Sheikh Mansour bin Zayed Al Nahyan has converted all of his existing GBP304.9m ($488m) shareholder loans made to the club into equity.
Sheikh Mansour, deputy prime minister and minister for presidential affairs, has also purchased further shares to a value of GBP89.6m ($143m) as a measure of his long term commitment to the club, the club said in a statement on its website.
Chief financial and administration officer Graham Wallace said: “The owners' decision to convert debt to equity is in line with their previously-stated financial strategy and is fantastic news for supporters of Manchester City, whose club is now on a secure financial foundation that gives a tremendous platform to build from in future years."
The financial year to May 2009 marked the beginning of a period of significant planned investment in all areas of the club, the statement added.
Turnover for the year ended May 31, 2009 increased by 6 percent to GBP87m, with this increase being offset by a significant increase in operating expenses to GBP121.2m, primarily driven by increased playing staff costs.
This resulted in a net operating loss of GBP34.2m and a net loss for the year after amortisation of player contracts and financing charges of GBP92.6m.
TV Revenues were up 12 percent to GBP48.3m mainly as a result of UEFA cup performance, offset partially by a lower league placing than in the previous year.
Revenues from other commercial activities decreased by 8 percent but this decrease was offset by significantly improved performances in the club's core commercial areas of retail and partnerships.
Costs relating to amortisation of player contracts increased in the year, rising to £39.4m from £25.4m in the previous year and reflecting again the costs of building a new young playing squad. Interest payable and similar charges increased significantly as a result of the increased level of shareholder loans made to the business during the year.
City, who fired manager Mark Hughes and replaced him with Roberto Mancini last month, are fifth in the standings, two points behind fourth-placed Tottenham with a game in hand.For all the latest sports news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.