Glazers set to pay off £220m PIK debt
The Glazer family are about to astound their critics by paying off their controversial £220m (€260m) payment-in-kind notes without using money drawn from Manchester United.
Co-chairman Joel Glazer has issued a ’voluntary free-payment notice’ to the lending houses that stumped up the loan confirming it will be paid off in full.
Under the terms of the £500m (€589m) bond which is United’s responsibility, the Glazers could take £70m (€82.5m) out of club funds to pay part of the PIK debt, which is lodged against the family.
However, it does not appear this is the case, even if there has been no comment from United about how the money to pay off the PIKs has been raised.
It is possible the Glazers could have sold a chunk of the club or sold off other business interests, which include their Tampa Bay Bucaneers NFL franchise, or they might have refinanced.
More may become apparent later today when United are due to publish their results for the last quarter to bond holders.
They are likely to be asked to address the issue in a conference call with investors.
Many supporters will remain sceptical about the news, which in theory confirms Alex Ferguson’s previous claims that he has a large transfer kitty at his disposal.
Supporters opposed to the Glazers have always claimed that such talk was false, with the money being earmarked for the PIK loans, which are now attracting interest at an eye-bulging 16.25%.
Last month United reported losses of £83.6m (€98.55m), with more than £40m (€47m) attributable to interest payments on the £500m bond issue, and accrued interest on the PIK loans.
