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19/08/2010

Glazer debt interest climbs yet higher

This week the interest rate on the infamous Payment in Kind ("PIK") loans taken out by the Glazer family in 2006 and secured on their ownership of Manchester United rises from 14.25% to a staggering 16.25% per annum. According to the Financial Times, the increase in the interest rate has been triggered by the Glazers' failure to keep the amount of debt down to targets struck in 2006.
 
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, their US businesses are struggling and the only source of cash is our football club. The bond issue allows the Glazers to take hundreds of millions of pounds out of the club to pay down the PIKs, despite David Gill telling us that they are "their responsibility".
 
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 the Glazers' exploitation of Manchester United.

 

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