Skip to main content

AC Milan hit by debt problems

AC Milan have total debt of €300m which is similar to that of rivals Inter. However, the greater part of this debt carries an interest rate of 11 per cent and the rest is at 7.7 per cent. Inter Milan are paying 4.9 per cent on their debt. AS Roma carry a smaller debt at 7 per cent.

AC Milan is struggling to investors to refinance more than €300m in high interest loans it has from US hedge fund Elliott Management. If it is unable to refinance the debt by next October, Elliott Management will seize control. It is thought that they have a 50-50 chance of success. Uefa has voiced concerns about the club's financial situation.

Asset managers have typically been unwilling to lend to football clubs, due to the unpredictability of cash flows that can vary considerably depending on how a club does on the pitch.

Little-known Chinese investor Yunghong Li bought the club earlier this year for €740m from Silvio Berlusconi. The limited information about Mr Li's wealth is proving a barrier to AC Milan's efforts to refinance its debt.

Inter Milan, meanwhile, has issued a bond, the first public bond sale from a European club since Manchester United tapped the debt markets in 2010. Inter Milan is also now majority owned by a Chinese investor, but its owner, Suning, is a large publicly listed retail conglomerate.

The bond uses a 'waterfall' payment that ensures money is used to service debt before it is spent on the club. As a result, the bond was in demand and has been trading up in the secondary market. As well as paying off existing debts, the club has received a €82m cash infusion.

Labels:

Comments

Post a Comment

Popular posts from this blog

It's no deal say Spurs insiders over Taiwanese takeover

Senior figures at Tottenham Hotspur insisted on Friday that they had not been informed of any deal to sell Daniel Levy’s stake in the club. A business group, Eight Sports Capital — which is said to include a billionaire Taiwanese financier — claimed that it had an agreement in place to buy a 24.99 per cent stake in ENIC, the club’s majority owners, from Levy, who owns 29.88 per cent. The Times has been told Ng Wing Fai and Brooklyn Earick form part of the group, having both been linked previously to potential takeovers of the Premier League club. The Taiwanese businessman, Richard Tsai, is also said to be part of the consortium. He is reportedly worth £7 billion.  Last year Earick, the former DJ and tech entrepreneur, was part of an attempted £4.5 billion takeover, which was “unequivocally rejected” by Spurs.  An ENIC spokesperson said: “We can confirm that neither ENIC nor THFC are aware of any sale by Daniel Levy’s Family Trust of its minority stake in ENIC, THFC’...
Post a Comment
Read more

Reports about Charlton sale exaggerated

Reports have appeared in The Guardian and elsewhere that Charlton has been put up for sale. Richard Cawley is an authoritative local journalist who runs a South London Sport substack site.  He reached out to the club yesterday evening to ask for comment on The Guardian’s article. Early indications from the club have been that nothing has changed since the story about them seeking investment, except that it is now a different company doing it. Charlton have since managed to consolidate their place in the Championship, avoiding an instant return to League One, with their women’s side promoted to the WSL, returning to the top flight for the first time since 2007, although staying there is likely to be costly. It would be counter-intuitive for owners Global Football Partners not to progress the club when looking for investment, that the focus remains on driving it forward, that their spend this summer is in line with long-term planning and will see an increase in wages spent on players...
Post a Comment
Read more

Hull City's 'strange' loan

When football finance guru Kieran Maguire seems flashing lights in a club's loan deal, I become concerned.  He is the leading football finance expert in the UK. Hull City have borrowed £55m against their stadium and training ground yet they should get £30m from the Premier League before long.  What is going on? https://www.bbc.co.uk/sport/football/articles/cpwel48y51do
Post a Comment
Read more