Manchester United fans have been asking for transparency about the club’s finances as it remained unclear how the Glazers were able to pay off their high interest bearing payment-in-kind (PIK) loans. However, spokesmen for the Glazers insisted that it was nothing to do with the club, although the loans were secured against the Glazers’ shares in United.
Manchester United fans have been asking for transparency about the club’s finances as it remained unclear how the Glazers were able to pay off their high interest bearing payment-in-kind (PIK) loans. However, spokesmen for the Glazers insisted that it was nothing to do with the club, although the loans were secured against the Glazers’ shares in United.
Manchester United Supporters’ Trust (MUST) consider that it was pressure from fans that stopped the Glazers taking money out of the club as they would have been entitled to do. It seems most likely that the Glazers have refinanced the debt at a preferential rate of interest. If the new arrangement is secured against their shares in the club, it remains a matter of concern for fans.
Despite the PIK repayment, the quarterly financial update released yesterday emphasised that the club remains in debt. Interest on the £508m bond could reach £45m this year. The club, however, point to the fact that commercial revenues were up 24 per cent year-on-year, although this in part reflects a bounce back from the situation in the aftermath of the global financial crisis.
There has been speculation that the redemption of the PIK notes is a prelude to selling off the club. In particular it has been suggested that the Glazers would be prepared to accept an offer of around £1 billion which would make purchase affordable for the Red Knights consortium. If that does happen it is likely to be in the longer term. A partial sale is another possibility, however, given that some of the Glazers’ other business have reportedly been encountering difficulties.