There has been a lot of talk recently that the club would have to restructure its large debt accrued during the takeover by Malcolm Glazer and his family some 14 months ago, and today its been announced that the club have finalised a ?660 million pound debt restructuring. This now means that the clubs? annual interest charge will fall from ?90 million to ?62 million, while the overall amount borrowed could rise to ?660 million (from ?580 million).

Ok, so what exactly does this mean? Well, I should preface this my saying that I’m no economist, but it seems that the Glazer?s hold on the club has been yet further strengthened. This is because as part of the deal the club has also halved (to ?135 million) the amount it owes in PIK (payment-in-kind) notes. PIK’s have very high rates of interest, and if they were not repaid then the Glazers could have been forced to handover part of their stake in the club. Basically, now that the amount owed in PIK?s has been halved there will be less interest to repay, meaning the Glazers are less likely to have to give up part of their stake, which in turn means that they will feel much more secure in their ownership of the club.

Obviously that news isn?t exactly music to the ears of United fans, myself included, but despite my concern that the amount of money the club could end up borrowing has increased, the debt restructuring does put us on a (slightly) more solid financial footing, which can only be a good thing. We can?t control who owns our club, unfortunately, (just ask any Villa fan) and while things like debt restructuring may be alien to fans used to the club being among the richest in the world, it?s certainly something we?ll all have to get used to.

The club themselves have - at the time of writing - yet to release a statement on the matter, but a Glazer family spokesperson said that the debt restructuring deal, along with the recent increase in Old Trafford?s capacity and the new sponsorship deal with AIG, means that there will be ?sufficient funds in the transfer market? for Fergie to spend - note the word ’sufficient’ rather than, say, ‘ample’. Let?s hope he spends whatever money he’s given wisely, because if we don?t succeed on the pitch, our financial situation would leave us in deep trouble, and not having funds for transfers would be the least of our worries.

This entry was posted on Tuesday, July 18th, 2006 at 7:47 am and is filed under Manchester United. You can subscribe via RSS 2.0 feed to this post's comments. Both comments and pings are currently closed.