Man Utd saves €40.7m after refinancing

Manchester United looked to have secured a major financial boost today after reportedly cutting £28m (€40.7m) from its annual interest bill.

The Premiership football club, which was acquired by the Glazer family 14 months ago, is said to have carried out a refinancing of its debt.

According to The Financial Times, the club’s improving financial prospects enabled it to halve to £135m (€196.1m) the amount it owes in the form of “risky” payment-in-kind notes held by three hedge-fund investors.

The notes were accruing interest at £63m (€91.5m) a year and could have forced the Glazers to hand over part of their stake if they were not fully repaid.

As a result, Manchester United’s annual interest charge will fall to £62m (€90.1m), compared with £90m (€130.8m) previously, although overall borrowings will rise from £580m (€842.6m) to £660m (€958.9m), the report said.

In the past year, the club’s prospects have been boosted by a four-year sponsorship deal with insurance group American International Group, while the capacity of its Old Trafford stadium has been extended to 76,000.

An improved Premier League broadcasting deal is also likely to boost the club’s finances from the 2007/2008 season.

The FT said the club and the Glazer family declined to comment on the refinancing, although a spokesman for the Glazers said the amended structure would continue to provide manager Alex Ferguson with “sufficient funds in the transfer market”.