US hedge fund Elliott announces takeover of Italian club AC Milan

US hedge fund Elliott announced it has taken over Italian giants AC Milan after the club’s Chinese owners failed to repay debt, saying the deal opened “a new chapter” for the soccer institution.

Elliott Management pledged to inject 50 million euros ($59 million) to bring financial stability to the seven-time European champions after Chinese owner Li Yonghong missed a Friday deadline to repay 32 million euros.

Elliott’s founder and co-CEO Paul Singer said his fund “looks forward to the challenge of realizing the club’s full potential and returning the club to the pantheon of top European football clubs where it rightly belongs.”

The changes at the top come as the club faces a ban from next season’s Europa League for failing to respect the break-even requirement in European soccer governing body UEFA’s Financial Fair Play (FFP) rules.

FFP regulations say that any club in Europe spending more than its generated revenue could face sanctions.

In a statement from May 22, UEFA expressed doubts at Milan’s ability to refinance loans from Elliott due to be repaid in October.

Milan are appealing UEFA’s decision at the Court of Arbitration for Sport, which is expected to announce a final ruling on July 19.

Milan splashed out over 200 million euros on players last summer but finished sixth in Serie A and failed to qualify for the more lucrative Champions League.

With Elliott taking over Li’s majority stake, the Chinese directors currently on the Milan board will be replaced, most likely with representatives from the hedge fund.

Elliott helped Li’s investment vehicle Rossoneri Sport Investment Luxembourg to complete the long-winded 740 million euro purchase of Milan from former Italian prime minister Silvio Berlusconi’s investment firm Fininvest in April last year.

The fund lent Li just over 300 million euros at high interest rates – reportedly as much as 11 percent.

The deal was originally due to close at the end of 2016, but was delayed partly because the group couldn’t export funds from China, as the country tightened control on money invested abroad.

However, the sale was also shadowed by questions over the source of Li’s wealth. In October The New York Times claimed that “virtually nobody” in China had ever heard of him.