MILAN: The saga of a possible Chinese takeover of Silvio Berlusconi’s AC Milan grew ever more confusing after the consortium sought financial backing from United States private equity fund Elliott.
Fininvest, the former Italian Prime Minister’s holding company, agreed a deal in August to sell the club for €740m ($783.7m), including €220m in debt, to a Chinese consortium.
Although the original deal was supposed to close on December 13, Sino-Europe Sports Investment Management Changxing (SES) failed to receive approval from the Chinese government which has led to a number of fresh deadlines being drawn up.
Reuters, quoting a lawyer and a source close to the matter, said Elliott will now provide €300m in financing to the Chinese consortium with the deal expected to close on April 14.
This comes after a statement released by the consortium on Saturday said that Luxembourg-based Rossoneri Sport Investment Lux would replace the original Chinese bid vehicle, SES.
The Chinese consortium has paid €250m in four parts to Fininvest.
A further €270m is due on April 14, with the rest of the purchase price being paid in the form of assumed debt. Reuters said Elliott’s financing deal includes a cash injection into AC Milan itself, as well as assistance for the consortium to seal the deal.
The US fund will reportedly provide €180m to complete the acquisition and a further €73m to help the club cover short-term payments, said a lawyer working for AC Milan and Yonghong Li, the entrepreneur leading the consortium.
Reuters added that an additional €50m would be invested in the club, bringing Elliott’s total exposure to around €300m. The US fund reportedly has a guarantee over the financing. Elliott is said to have made the investment due to the consortium’s business plan for Milan, specifically using the club’s brand to drive merchandising sales in China.