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Manchester United's Glazer family to pay off £220m of loans

Loans were initiated to help finance 2005 takeover of football club.

Owners of Manchester United FC - the Glazer family - are set to pay off £220m of their high-interest payment-in-kind (PIK) loans, borrowed to help finance their £790m takeover of the football club in 2005.

The Glazers' holding company Red Football Joint Venture will pay off the entire high-interest loan next week, according to Bloomberg.

The club's joint chairman Joel Glazer is understood to have signed the document which has been sent to a group of three US hedge funds which are the holders of the loan.

According to Bloomberg, the American family will use their own money and not the club's to settle the debt, which carried an annual interest rate of 16.25 per cent.

The Glazers converted a bank loan secured against the club into a £526m bond in January, following which they were given the freedom to make one withdrawal of £70m from club funds in order to pay off some of their overall PIK loan.

Manchester United made a £79.6m pre-tax loss for the last financial year. Despite the losses, the club generated revenues of £278m and has over £100m of cash reserves.