Newcastle United owners PIF confirm two major deals worth £24billion

Newcastle United owners, Saudi Arabia’s Public Investment Fund, have announced two major financial deals this week.

PIF, who own an 80% stake in Newcastle United following last October’s takeover, have announced this week that it has secured an almost £14billion ($17billion) loan from a group of 25 banks.

This will partly refinance a £9billion loan the sovereign wealth fund took out in 2018 that will be repaid early.

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A PIF statement claims the £14billion, seven-year loan represents ‘the largest self-arranged term loan raised for general corporate purposes’ involving a global syndicate of 25 financial institutions from Europe, the US, the Middle East and Asia.

A general view inside the stadium during the Premier League match between Newcastle United and Everton FC at St. James Park on October 19, 2022 in Newcastle upon Tyne, England. (Photo by George Wood/Getty Images)

Fahad Al-Saif, Head of Global Capital Finance Division at PIF, said: “This new facility is a strong endorsement of PIF’s medium-term capital raising strategy.

“It is a significant achievement for PIF, raising a record-sized term facility in the longest tenor ever for a loan of its size that is subscribed to by an unprecedentedly diversified number of lenders. PIF will continue to explore a variety of debt funding sources as it delivers on its strategic objectives.”

PIF has pledged to invest £32.62billion ($40billion) a year in Saudi Arabia through to 2025 as part of its medium-term capital raising strategy and 2022 Annual Capital Raising Plan.

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PIF pledge £10.6billion across 14 cities

PIF also confirmed that £10.6billion ($13billion) would be invested in entertainment destinations in Saudi Arabia.

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Saudi Entertainment Ventures (SEVEN), a subsidiary owned by PIF, announced that 21 entertainment destinations will be developed across 14 cities in the kingdom.

Each destination will feature over 150 attractions in partnership with major international brands with construction already under way at SEVEN’s first entertainment destination in the Saudi capital Riyadh.

Newcastle United will be travelling to Riyadh for a warm weather training camp next week where they will play a friendly match against Saudi Pro League champions Al-Hilal on December 8.

What this means for Newcastle United?

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While there is no direct impact for Newcastle United, it does further signify the sheer scale of PIF’s portfolio, ambition and strategic approach. The £305million spent to acquire Newcastle United last year pales in comparison to the recent deals announced just this week.

Last month, PIF along with Newcastle co-owners PCP Capital Partners and RB Sports & Media announced a further £70.4million of equity had been invested into the football club.

The United owner’s total investment now exceeds £450million as the consortium plan to make the club a force in world football.

A Newcastle statement read: “The capital injection follows a wide range of investments in the club that has seen an upgrade of training facilities, improvements to St. James’ Park and recruitment of a number of senior executives to build out the commercial operations of the club, as well as investment in the playing squad.

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“Further investment is expected which reflects the ownership group’s long-term commitments for Newcastle United.”

Newcastle are also seeking a new major sponsorship deal for the start of the 2023-24 season after negotiating an early exit from their current deal with FUN88. PIF portfolio companies have been touted as potential new sponsors but nothing has been confirmed.