Red Football Joint Venture Ltd, which is owned by the Glazer family, filed accounts today for the year ending June 2009 showing their overall debt has gone past the £700million mark for the first time, increasing by £17million from £699million. The biggest rise has come in the 'payment in kind' (PIK) loans, which have had an interest rate of 14.25% which is simply added to the existing debt. The debt from the PIKs has increased by £27million to £202million and the accounts reveal the situation is due to get even worse in August when a new 16.25% rate kicks in. The situation accounts for the urgency with which the Glazer family are seeking a cash injection from a £500million bond issue to refinance the PIK loans in particular. The overall debt figures, not contained in the prospectus for a £500million bond issue released last week, are bound to worry fans, some of whom are already taking up fresh protest action against the Glazers. The accounts also reveal that the £80million received from Cristiano Ronaldo's sale has led to a decent profit for Red Football. The company paid out £68.5million in interest on their debts in 2009 but, unlike the previous year when interest payments were similar, they returned an overall profit of £6.4million in 2009. In 2008, they returned a £47million loss. The profit can be almost entirely explained by the sale of Ronaldo to Real Madrid in June for £80million. Red Football's accounts record an £80.7million profit on "disposal of players" compared to a £21million 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 told Press Association Sport: "The club has a £50million surplus to work with once the interest payments have been made." Manchester United's accounts also show their chief executive David Gill was paid £1.8million last year. The accounts also confirm that six of Malcolm Glazer's children, who are all directors of Red Football, were each given loans worth £1.67million from United's parent company. Keith Harris, the head of Seymour Pierce merchant bank who has been involved in four Premier League club takeovers, questioned the wisdom of such a practice. Harris told The Guardian: "You would not expect directors to be borrowing money at a company of United's size and, although it is now allowed legally, it is generally still frowned upon because it does not create a good impression of the directors' governance of the company."
