Glazers to pay off PIK loans
Tue 16th Nov 2010 | Money & Finance
Manchester United’s under fire owners have revealed they intend to pay off their controversial £220million payment-in-kind (PIK) notes without using money drawn from the club.
Co-chairman Joel Glazer has issued a 'voluntary free-payment notice' to the lending houses that stumped up the loan confirming it will be paid off in full.
Under the terms of the £500million bond which is United's responsibility, the Glazers could take £70million out of club funds to pay part of the PIK debt, which is lodged against the family.
However, it does not appear this is the case, even if there has been no comment from United about how the money to pay off the PIKs has been raised.
More may become apparent later today when United are due to publish their results for the last quarter to bond holders.
They are likely to be asked to address the issue in a conference call with investors.
Many supporters will remain sceptical about the news, which in theory confirms Sir Alex Ferguson's previous claims that he has a large transfer kitty at his disposal.
Supporters opposed to the Glazers have always claimed that such talk was false, with the money being earmarked for the PIK loans, which are now attracting interest at an eye-bulging 16.25%
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