ENGLISH Premier League winner Manchester United has now trimmed £10 million off the annual interest bill on its debt through a refinancing arranged by Bank of America.
The move could free up more cash to help new team manager David Moyes strengthen his team for next season after taking over from Sir Alex Ferguson, who retired this month after leading United to 13 league titles.
The American Glazer family bought United for £79m in 2005 but burdened the club with heavy debts. A vocal section of United fans have argued that high interest payments have forced up ticket prices and diverted cash that should have been spent on players.
United’s debt currently stands at £367m and the club made interest payments of £46m in the nine months to the end of March, its latest earnings release showed.
Under the new financing deal, the club’s MU Finance subsidiary is redeeming high interest bonds with a total value of around £192m and replacing it with a new loan facility with Bank of America. Interest on the new loan has been set at Libor plus between 1.5 to 2.75 per cent per year, compared to more than 8 per cent on the bonds.
The football club said: “If calculated today, we estimate that the starting rate of interest would be approximately 2.78 per cent, resulting in an interest reduction of around £10m per year.”
United is going through a period of management transition in the boardroom as well as on the pitch, with executive vice-chairman Ed Woodward taking on more powers after chief executive David Gill said he would be stepping down at the end of June.