Mancs Will Be in as Much trouble as us Financially

[Flight]

They really are in as much trouble as us in coming years. A lot of their payments are deferred but they'll be coming home to roost.

 

Uniteds Rising Debt

 

[quote

FRESH FEARS OVER UNITED`S RISING DEBT

 

]Manchester United's anti-Glazer faction fear huge sums of cash are going to be heading out of Old Trafford following a steep rise in the interest rates on controversial payment-in-kind notes raised to complete the family's takeover in 2005.

 

Apparent failure to meet set terms laid down in the PIK loan agreement by August 16 meant that the interest rates have shot up from 14.25% to 16.25%.

 

United chief executive David Gill has always stressed that as these loans are lodged against the owners rather than the club, they have no direct effect on life at Old Trafford.

 

However, the Manchester United Supporters Trust (MUST) noted at the time of a huge refinancing exercise earlier this year, when a £504million bond issue proved to be highly successful, that the small print allowed the Glazer family to take £95million out of the club's reserves.

 

And MUST chairman Duncan Drasdo believes the clause was inserted for a reason.

 

"We believe in the next 12 months accounts will start to show them taking even more money out of our club," he said.

 

"They have already wasted more on interest and fees than the total sum of all season ticket money paid by every supporter in their entire five-year ownership.

 

"On top of that, how much more will this extra interest cost us per season?

 

"Imagine what we could achieve if released from the millstone of the Glazers' ownership."

 

MUST had been pinning its hopes on a successful bid from the Red Knights group last spring following previous suggestions they were willing to complete a purchase of the club that would leave the Glazer family with a small profit.

 

However, with talk of a bid having to hit £1.5billion for the Glazers to be interested, the Red Knights eventually decided to back down.

 

Press Association Sport understands the group are monitoring developments and would be willing to step in if the price dropped to a more realistic level.

 

Yet the Glazers have never given any indication of wanting to sell, even though their PIK debt, which originally stood at £265million and was then reduced to £138million, will end up rising to around £267million next year.

 

 

 

Mancs Debt Rises

 

Manchester United's owners the Glazer family have been hit with a steep rise in their annual debt payments after the club exceeded a limit on their overall borrowings which form part of their controversial PIK loans agreement.

 

The Glazers used the high interest form of financing to help raise the funds for their £790m takeover in 2005.

 

But the loans, originally worth £265m and taken out with three hedge funds - Citadel, Och Ziff and Perry Capital - but reduced to £138m as part of a 2006 refinancing, include strict covenants relating to net debt levels and the club's earnings.

 

Failure to meet the borrowers' terms by 16 August meant the annual interest rose from 14.25% to 16.25%.

 

Analysts predict the annual payment will now increase to about £38m, up from £25m last year. Because the interest on the loans is "rolled up" and added to the original sum borrowed the Glazers will owe around £267m on the PIK loans by 2011 - almost a £100m increase in only five years.

[Jarg Armani]

They'll get sorted before we do.

 

The Ev will probably build a ground before us.

[Spion kop]

they have better income due to their stadium and other assets, we're in a far worse situation.

[Hightown Phil]

they have better income due to their stadium and other assets, we're in a far worse situation.

 

Their debt is greater though. They are potentially worse off than us.