U.S. investment fund Oaktree Capital Management said it had taken ownership of Italian soccer champions Inter Milan after a missed 395 million euro ($428 million) payment from the club’s Chinese majority shareholder.
Granted by Oaktree in 2021 to the Luxembourg-based vehicle through which Chinese conglomerate Suning 002024.SZ controlled Inter, the loan was guaranteed by the stake in the club.
That gave Oaktree, which specialises in providing rescue funding to struggling firms, the potential right to take control of the club in the event of a default.
“Oaktree is committed to working closely with Inter Milan’s current management team, partners, the league and governing bodies to ensure the club is positioned for success on and off the pitch,” it said in a statement.
A source close to the matter said Oaktree, which has only limited previous involvement in sports franchises, was not planning to sell Inter immediately and was prepared to be a “patient investor.”
The upheaval off the field contrasts with the club’s success on it, with Inter having last month secured their 20th Serie A league title and the second under Suning’s ownership.
Founded in 1908, Inter is one of the traditional powers in Italian soccer and home to top players including Lautaro Martinez and Nicolo Barella.
EMERGENCY LOAN
There was no immediate comment from Suning which bought a majority stake in the club in 2016 in one of the highest-profile forays by a Chinese business into European soccer.
Since then, Chinese authorities have imposed curbs over overseas spending in sport and Suning has been hit by the COVID-19 downturn.
That prompted Suning to get a 275 million euro emergency financing package, carrying roughly 12% interest, three years ago from Oaktree, which helped Inter to weather the pandemic crisis.
In a letter to fans published on the club’s website on Saturday, Inter Chairman Steven Zhang, the 32-year-old son of Suning’s founder Zhang Jindong, warned the club’s stability was at risk as attempts to find an agreement with Oaktree had been unsuccessful.
Inter made an annual loss of 86 million euros in the 2022-2023 fiscal year and its total gross debts stood at 807 million euros.
Oaktree’s move mirrors the takeover of Inter’s local rivals AC Milan by U.S. hedge fund Elliott Management in 2018. Elliott took control of AC Milan after Chinese businessman Li Yonghong missed a payment to the club.
Elliott eventually sold AC Milan to RedBird Capital Partners in a 1.2 billion euro deal four years later.
(Reuters)
