Manchester United see debts rise

Pa,Martyn Ziegler
Wednesday 20 January 2010 16:25 GMT
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The Glazers are so keen to raise cash through bonds to reduce the interest on the debt
The Glazers are so keen to raise cash through bonds to reduce the interest on the debt (GETTY IMAGES)

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Manchester United's parent company's overall debt has swelled to £716.5million, latest accounts reveal.

The company Red Football Joint Venture Ltd, which is owned by the Glazer family, filed accounts today for the year ending June 30 2009 showing their overall debt has gone past the £700million mark for the first time, increasing by £17million from £699million.

The biggest rise has come in the payment in kind (PIK) loans, which typically have a higher interest rate, which show a £27million increase to £202million. Bank loans, meanwhile, have dropped by £9million to £509million.

The overall debt figure, not contained in the prospectus for a £500million bond issue released last week, illustrate why the Glazers are so keen to raise cash through bonds to reduce the interest on the debt.

Red Football Joint Venture paid out £68.5million in interest on their debts in 2009 but unlike the previous year, returned an overall profit of £6.4milllion in 2009. In 2008, they returned a £47million loss.

The profit can almost entirely be explained by the sale of Cristiano Ronaldo to Real Madrid in the summer for £80million.

Red Football Joint Venture's accounts record an £80.7million profit on "disposal of players" compared to a £21million profit in 2008.

A spokesman for the Glazer family insisted that the debt did not have a bearing on the operation of the club.

He said: "The club has a £50million surplus to work with once the interest payments have been made."

Manchester United's accounts also show their chief executive David Gill was paid £1.8million last year.

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