English Manchester United trims interest after payment to hedge investors

Manchester United clipped GBP 28 million from the club's annual interest bill.

The Premier League club, acquired by the Glazer family 14 months ago, refinanced its debt.

Manchester United's improving finances enabled the club to halve to GBP 135 million they owe in the form of "risky" payment-in-kind notes held by three hedge fund investors. The notes were accruing interest at GBP 63 million a year and could have forced the Glazers to hand over part of their stake if they were not fully repaid.

Now, the club's annual interest charge will fall to GBP 62 million, compared with GBP 90 million previously, although overall borrowings will rise from GBP 580 million to GBP 660 million.

In the past year, the club's prospects have been boosted by a four-year sponsorship deal with insurance group American International Group, while the capacity of Old Trafford has been extended to 76,000. An improved Premier League broadcasting deal is also likely to boost United's finances from the 2007-2008 season.

The club and the Glazer family have declined to comment on the refinancing, although a spokesman for the Glazers told the Financial Times the amended structure will continue to provide manager Sir Alex Ferguson with "sufficient funds in the transfer market."

Source: euFootball.BIZ © Copyright 2006 - All rights reserved.