January 20 - Manchester United’s parent company’s overall debt has swelled to £716.5m, their latest accounts reveal.
The company, Red Football Joint Venture Ltd, which is owned by the Glazer family, filed accounts today for the year ending June 30, 2009, showing their overall debt has gone past £700 million for the first time, increasing by £17 million from £699 million.
The biggest rise has come in the payment in kind (PIK) loans, which typically have a higher interest rate, which show a £27 million increase to £202 million.
Bank loans, meanwhile, have dropped by £9 million to £509 million.
The overall debt figure, not contained in the prospectus for a £500 million bond issue released last week, illustrates why the Glazers are so keen to raise cash through bonds to reduce the interest on the debt.
Red Football Joint Venture paid £68.5 million interest on their debts in 2009, but unlike the previous year, returned an overall profit of £6.4 million in 2009.
In 2008, they returned a £47 million loss.
The profit can almost entirely be explained by the sale of Cristiano Ronaldo from the Premier League champions to Real Madrid in the summer for £80 million.
Red Football Joint Venture’s accounts record an £80.7 million profit on “disposal of players” compared to a £21 million profit in 2008.
A spokesman for the Glazer family insisted that the debt did not have a bearing on the operation of the club.
He said: “The club has a £50 million surplus to work with once the interest payments have been made.”
Manchester United’s accounts also show their chief executive David Gill was paid £1.8 million last year.