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Glazer's over £1bn in debt

Mon 7th Jun 2010 | Money & Finance

An investigation by the BBC’s Panorama programme has revealed that Manchester United's owners are £1.1billion in debt

The programme which is due to be aired tonight (7/06/2010) has uncovered evidence that the Glazer family are more than £400million more in the red than previously thought, having borrowed heavily against their shopping mall business in the USA.

According to the BBC the Glazers have borrowed £388million against that business, and a further £66million against the Tampa Bay Buccaneers.

City analyst Andy Green, who carried out some of the research, found mortgages had been taken out on 63 of the 64 malls owned by First Allied, the company owned by the Glazers.

Four of those malls have subsequently gone bust, with a further 28 placed on a 'watch list' by banks, concerned about their abilities to keep up with the repayments.

The properties are now worth around £380million, but the mortgages are valued at £395million.

Green believes United borrowed against these malls to help pay for their purchase of United in 2005.

He said: "At the time when they had to present a huge amount of cash over here in the UK they borrowed a huge amount of extra money in the US and publicly they didn't buy anything else that year."

Green also claimed this could represent problems for United in the future, with the club and the Buccaneers now the family's main source of income.

He said: "Around a quarter of them (the shopping malls) cannot pay the interest on their mortgages already. Another quarter are coming off interest-free deals and, when those interest-free deals end, those shopping centres won't be able to pay their mortgages either.

"So the whole thing adds up to a real cash-flow problem for the Glazer family."

The Glazers took fees and loans totaling around £22.9million from the club, and this could increase if their cash-flow problems continue.

United themselves are some £700million in debt, and would have posted a significant loss last year had it not been for the sale of Cristiano Ronaldo.

 

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