Manchester United reveal refinancing plansTuesday, 18 July 2006
Manchester United manager Alex Ferguson can enter the transfer market with increased optimism after the club confirmed a refinancing package which will slash their annual interest payments by almost 30%.
A deal is due to be concluded at some point next month which will see charges on loans fall from a massive £90million per year to £62million.
Although United's overall debt has increased to £660million under the restructuring plan, the club have been able to cut the amount borrowed at huge cost from hedge funds.
In addition, the remaining £135million owed in the form of higher risk payment-in-kind notes no longer convert into equity, releasing the club from the possibility of being run by bankers.
'This move represents good housekeeping,' said a club spokesman.
'It ensures that Alex Ferguson will be provided with sufficient funds to compete in the transfer market.'
Such a move had been widely anticipated since Malcolm Glazer completed his controversial £790million buy-out just over 12 months ago.
At £660million, United now have the highest debt ever seen at a Premiership football club and many will continue to argue such a burden can only be detrimental to the club's chances of enjoying the kind of sustained success they had in the 1990s.