Sports: Mi­lan’s Chinese owner seeks new in­vestors

Govt reg­u­la­tions force part­ners to aban­don con­sor­tium: sources

Global Times - Weekend - - FRONT PAGE -

The Chinese owner of for­mer Euro­pean soc­cer cham­pi­ons AC Mi­lan is look­ing for one or more in­vestors to share the fi­nan­cial bur­den, less than six months af­ter buy­ing the loss-mak­ing Ital­ian club, two sources said on Fri­day.

For­mer Ital­ian prime min­is­ter Sil­vio Ber­lus­coni fi­nal­ized the sale of AC Mi­lan in April to a Chinese-led con­sor­tium headed by Li Yonghong in a 740 mil­lion euro ($872 mil­lion) deal, the big­gest Chinese in­vest­ment in a Euro­pean soc­cer club.

But Li has since ef­fec­tively be­come the sole in­vestor af­ter his part­ners backed out fol­low­ing gov­ern­ment reg­u­la­tion on for­eign ac­qui­si­tions, es­pe­cially in soc­cer, ac­cord­ing to a source close to the mat­ter.

The source, who de­clined to be named be­cause of the sen­si­tiv­ity of the mat­ter, said Li would be more com­fort­able shar­ing the fi­nan­cial risk as­so­ci­ated with man­ag­ing and in­vest­ing in the club, which lost 75 mil­lion eu­ros in 2016 and is ex­pected to re­main in the red for this year at least.

A spokesper­son for AC Mi­lan said there was no in­di­ca­tion of any po­ten­tial changes in the club’s own­er­ship.

AC Mi­lan spent 230 mil­lion eu­ros on play­ers dur­ing the lat­est trans­fer sea­son, be­hind only Paris St Ger­main and Manch­ester City.

AC Mi­lan is com­pet­ing in Europe’s sec­ond-tier cup com­pe­ti­tion and lies sixth in the do­mes­tic league.

A sec­ond source said one op­tion be­ing con­sid­ered to lure po­ten­tial new in­vestors, in­clud­ing Ital­ian ones, was a Chinese mar­ket list­ing within a cou­ple of years.

The first source said other Chinese in­vestors could emerge if the au­thor­i­ties soften their stance on for­eign in­vest­ment later this year.

The sale of AC Mi­lan to Li took far longer than ex­pected to com­plete as China reg­u­lates on non-strate­gic for­eign ac­qui­si­tions, es­pe­cially van­ity deals in the sports in­dus­try.

In par­al­lel to the in­vestor search, Li’s ad­vis­ers are also work­ing on the pos­si­bil­ity of re­fi­nanc­ing the Chinese group’s debt with US pri­vate eq­uity fund El­liott – which res­cued the deal at the 11th hour, a third source said.

Gold­man Sachs and Mer­rill Lynch are in the run­ning for the re­fi­nanc­ing, this source said.

El­liott gave Li a 180 mil­lion euro life­line in March to com­plete the pur­chase plus 128 mil­lion eu­ros to in­ject into the team, fi­nance the ac­qui­si­tion of play­ers and al­low the club to re­pay its debt with banks.

The loans, with an av­er­age in­ter­est rate of just be­low 10 per­cent, will have to be re­paid by Oc­to­ber 2018.

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