Manchester United's debts swell to £716.5m
Manchester United's parent company's overall debt has swelled to £716.5 million, 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 £700 million mark for the first time, increasing by £17 million from £699 million.
The biggest rise has come in the payment in kind (PIK) loans, which typically have a higher interest rate, which show a £27 million increase to £202 million. Bank loans, meanwhile, have dropped by £9 million to £509 million.
The overall debt figure, not contained in the prospectus for a £500 million 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 £68.5 million in interest on their debts in 2009 but unlike the previous year, returned an overall profit of £6.4 million in 2009. In 2008, they returned a £47 million loss.
The profit can almost entirely be explained by the sale of Cristiano Ronaldo to Real Madrid in the summer for £80 million.
Red Football Joint Venture's accounts record an £80.7 million profit on ''disposal of players'' compared to a £21 million 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 £50 million surplus to work with once the interest payments have been made.''