Last updated : 13 January 2006 By Editor

If nothing else, at least it means David 'lapdog' Gill is now all but redundant. Go fetch Woodward's brew, you traitor....

From The Times:

Malcolm Glazer, the owner of Manchester United, has given the first clear indication of a possible refinancing of his controversial £790 million takeover. A “chief of staff” has been appointed to liaise with the banks that loaned the American billionaire the money to buy the club.

Ed Woodward, a former investment banker who played a key role in structuring the takeover when he was at JPMorgan has been hired to be the Glazer family’s “eyes and ears in the City”. The 34-year-old Bristol University graduate started work for Red Football, the Glazers’ takeover vehicle, on November 28 and is working alongside David Gill, the United chief executive, and the rest of the board. He reports directly to Glazer and his sons, led by Joel.

Glazer bought United last May, borrowing heavily to finance the transaction. About £374 million came from banks and a further £275 million was raised through the issue to three New York hedge funds of preference shares secured against the family’s stake in the club.

The rates of interest of these so-called PIK loans are widely regarded as punishing, ranging up to 20 per cent, but the payment is deferred. More pressing for the owners is to service the bank debt on the United balance sheet through the club’s cashflows. The interest alone on these loans was expected to be more than £20 million in the first year.

A refinancing of the original deal was expected at some stage. Woodward’s appointment does not directly point to a renegotiation, but it will nonetheless unsettle supporters concerned about their team’s performance after their early exit from the Champions League and Sir Alex Ferguson’s ability to compete in the transfer market for the best players.

The Glazers’ business plan, revealed by The Times last June, has already had to be rethought. It assumed that United would qualify for the lucrative knockout stages of the Champions League every season, reaching the quarter- finals at least every third year. Defeat by Benfica before Christmas, however, suggested that they may struggle to do so with the ease of past seasons.

After The Times learnt yesterday of Woodward’s appointment, the Glazers sought to play down its significance, but they did, for the first time, state that refinancing was an option. “No refinancing is imminent. However, it is an option that may be used in future,” a spokesman for the family said. “It is extremely common for companies to change their financing structure once a takeover is completed.”

The Glazers plan to publish accounts for last season this month. They should provide a clearer picture of United’s debt position but will cover only two months of the family’s reign, so may offer limited insight into whether past successes can be sustained on present resources.