Sports: Milan’s Chinese owner seeks new investors
Govt regulations force partners to abandon consortium: sources
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.