SempreMilan
·22 May 2024
Oaktree seize control of Inter: What it means and the difference with Milan in 2018
Oaktree seize control of Inter: What it means and the difference with Milan in 2018 | OneFootball
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It was made official this morning that the ownership of Inter has formally transferred from Suning to the American fund Oaktree.
As the Financial Times confirm, Oaktree Capital have ‘moved to seize control’ of Inter after their Chinese owners failed to repay an almost €400m loan. The Los Angeles-based fund said on Wednesday that it has ‘assumed ownership’ of the Nerazzurri.
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They were able to do so following Chinese retailer Suning’s failure to repay a three-year loan that expired on May 21. With the deadline having passed, that means that a pledge could be enforced whereby the shares transfer.
The initial focus of Oaktree will be to ensure the ‘operational and financial stability’ for the club, said Alejandro Cano, managing director and co-head of Europe for Oaktree’s Global Opportunities strategy.
“We are committed to the long-term success of the Nerazzurri and believe our ambitions for the club are united with those of its passionate fans in Italy and around the world.”
As MilanNews writes, it will not be the first time for a club in Milano change ownership over an unpaid loan. The same has happened to Inter six years after Milan passed from the hands of Yonghong Li to Elliott Management.
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In 2018 the execution, as far as the Rossoneri were concerned, was very rapid. In three days Paul Singer and his collaborators closed the case and took over Milan, held for four seasons, before the sale to RedBird Capital – owned by Gerry Cardinale – which came in 2022.
However, there is ‘one significant difference’ between Milan and Inter’s situations: that contract did not provide for the fair value to be given to whoever loses ownership, i.e. the difference between the market value of the club and the unrepaid loan, debts deducted (including the €400m bond).
This very detail could bring the parties into question, which Steven Zhang made clear in his statement. In other words, a very messy legal battle could be about to ensue which would obviously impact the stability of the club. Those debts that need repaying remain, too.
As MilanoFinanza reported, what Oaktree will find now they have enforced the pledge is an accumulated deficit over the last four seasons, including 2019-20, of €570m.
Regarding the assets, as of June, the net capital was negative by €162m, with total debts amounting to €800m. In other words, if you are a Milan fan, sit back and grab some popcorn.
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