United face new debt fears as Glazer loan interest rises

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The Independent Online

Manchester United's anti-Glazer faction fear huge sums of cash will be heading out of Old Trafford following a steep rise in the interest rates on controversial payment-in-kind notes raised to complete the family's takeover in 2005.

Apparent failure to meet set terms laid down in the PIK loan agreement by 16 August meant that the interest rates have shot up from 14.25 per cent to 16.25 per cent.

United's chief executive, David Gill, has always stressed that as these loans are lodged against the owners rather than the club, they have no direct effect on life at Old Trafford.

However, the Manchester United Supporters Trust (Must) noted at the time of a huge refinancing exercise earlier this year, when a £504m bond issue proved highly successful, that the small print allowed the Glazer family to take £95m out of the club's reserves. And the Must chairman, Duncan Drasdo, believes the clause was inserted for a reason.

"We believe in the next 12 months accounts will start to show them taking even more money out of our club," he said. "They have already wasted more on interest and fees than the total sum of all season-ticket money paid by every supporter in their entire five-year ownership. On top of that, how much more will this extra interest cost us per season? Imagine what we could achieve if released from the millstone of the Glazers' ownership."

Must had been pinning its hopes on a successful bid from the Red Knights group last spring, following previous suggestions that the group was willing to complete a takeover that would leave the Glazer family with a small profit. However, with talk of a bid needing to hit £1.5bn for the Glazers to be interested, the Red Knights eventually decided to back down.

It is understood that the group is monitoring developments and would be willing to step in if the price dropped to a more realistic level. Yet the Glazers have never given any indication of wanting to sell, even though their PIK debt, which originally stood at £265m and was then reduced to £138m, will end up rising to around £267m next year.

Nemanja Vidic, meanwhile, has signed a four-year contract extension with Manchester United. The announcement puts an end to the intense debate surrounding the Serb for over 18 months, with his future seemingly destined to be away from Old Trafford. Although Vidic never gave any impression of knowing where the stories about his apparent discontent in Manchester had come from, they never went away and both Milan and Real Madrid were said to be showing an interest after the World Cup.

However, Gill sprang a surprise during the club's pre-season tour of North America when he confirmed that Vidic, 28, who was not present, had agreed outline terms on a new contract.

The finishing touches have now been made, leaving Ferguson glad to have Vidic around until 2014. "We are delighted Nemanja has committed his future to the club," he said. "This kills all the silly speculation. Nemanja has developed into one of the best centre-halves in Europe and we are pleased he will be here for many years to come."

Vidic holds a notable place in United's history because his arrival from Spartak Moscow in a £7.2m deal was announced on Christmas Day 2005. Although he endured a difficult transition to the Premier League, Vidic has become famed for his no-nonsense approach to keeping forwards at bay. He was a central figure in each of United's three successive title wins and their Champions League triumph over Chelsea in 2008.

"I am very happy to sign this contract," he said. "I came to this club when I was young and have developed enormously with the help of the manager, coaching staff and my team-mates."

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