Glazers to pay off £220m of Manchester United debt

The owners of Manchester United, the American Glazer family, have eased the burden of debt on the club by agreeing to settle £220m in payment in kind (PIK) loans.

The high-interest loans were partly responsible for the club's £83.6m loss announced last month and have long been a source of anger among United fans, who despise the owners for saddling the club with massive debts since their takeover in 2005.

It is unclear where the Glazers have found the money to pay off the loans, although financial news service Bloomberg reports that club funds will not be used to settle the debts.

Once the loans, which carried annual interest of more than 16 per cent and were mainly owned by hedge funds, are paid off then the club's debt will consist only of the £526m bond issue from earlier this year.

United's holding company, Red Football Joint Venture Limited, told creditors that it had committed to "repay 100 per cent from the outstanding loan on Nov 22".

United chief executive David Gill said: "I can't speak for any other club but the United fans should not be concerned.

"We have a long-term financing structure in place, excellent revenues that are growing, we are controlling our costs... and we can afford the interest on our long-term finance."

He added that the club was "comfortable" with the business model.

But although the repayment will benefit the club, such is the unpopularity of the Glazers that the move has been met with widespread cynicism. There has even been speculation that the Glazers may have raised the cash by selling a stake in United to an unknown buyer, and even though the family claim not to have used club funds many simply do not believe them. ·