Glazers’ debt costs rise on PIK loan

THE Glazer family, the American owners of Manchester United, have seen interest payments on a £200m chunk of debt they used to buy the club rise 2% to 16.25% this week.

The increase will see the Florida-based Glazers – who have resisted pressure to sell the club – have to find more cash to service the high-interest Payment in Kind (PIK) loans, which are due to be repaid by 2017.

The increase int the rate mean the PIK loan will total more than £267m at the end of June next year, rising to more than £310m by 2012.

The interest payments must be made by the Glazer family rather than the club, but supporters’ groups fear the club will inevitably be affected.

Manchester United Supporters’ Club  chief Duncan Drasdo said: “The rise in the PIK interest rate this week, caused by the Glazers’ inability to hit their own targets, is another sad chapter in the story of their exploitation of Manchester United.

“The increasing cost of the PIKS will inevitably be borne by Manchester United. The Glazer family have failed to repay a single penny of their debts in the last four years… and the only source of cash is our football club.”

The Glazers tied around £716m of debt to the club when they bought it in 2007. They refinanced £500m of this in a bond last year.