Manchester United in debt refinancing deal: Reports |
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Published
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Tue, 18 Jul 2006 13:05
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LONDON - The world's most popular football club, Manchester United took a major step towards clearing off debts as it announced a refinancing package, which cuts the club's annual interest payments by almost 30 percent.
The deal is to be completed sometime next month and will see the clubs debts on loans fall from £90 million per year to £62 million. However United's overall debt is a staggering £660 million. But the club reduced the amount borrowed through considerable cost from hedge funds. With the current deal, the £135 million owed in high-risk note payments will no longer translate into equity. That means Sir Alex Ferguson will have ample funds to buy whatever players he needs. Right now with rumors that Rudd van Nistelrooy is heading to Madrid, United needs another striker to complement Wayne Rooney. It is speculated that Fernando Torres is a target, but that deal will not be cheap.
"This move represents good housekeeping," said a club spokesman on the refinancing. "It ensures that Sir Alex Ferguson will be provided with sufficient funds to compete in the transfer market." The deal was in the works ever since Malcolm Glazer took over Old Trafford for £790 million last year. The Glazer family did not offer any comment on the refinancing.
The club has made big strides money-wise after sealing a four-year shirt sponsorship deal with insurance group American International Group. The capacity at Old Trafford has also been extended to 76,000.
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