Italian giants close the financial year with a serious loss
Forget about Ronaldo, and France for a moment and let’s direct our attention to AC Milan. The team has been bought out by US hedge fund Elliot Management. After Li Yonghong’s Rossoneri Lux company defaulted on its debt repayment obligations. The Chinese businessman had bought the Serie A club from the former Italian prime minister Silvio Berlusconi with the help of Elliott.
The asset management group had lent him additional money to fund the purchase of the players and to repay club debts with the banks. However, Li failed to repay Elliott, paving the way for legal action that could see Elliott become the new owner of the Italian club.
Elliott confirmed the ownership change in a statement on Tuesday, which explained how they have also injected €50 million of equity capital into the Italian club to “stabilise the club’s finances.”
The Italian giants hope to put their money worries aside with this new shift, as they have to close the financial year with a loss of €75 million, as well as being banned from Europe.
“Ownership and control of the holding company that owns AC Milan has today been transferred to funds advised by Elliott Advisors [UK] Limited [‘Elliott’],” read the statement issued by Elliott. “This transfer has occurred as a result of steps taken to enforce Elliott’s security interests after the previous owner of AC Milan defaulted on its debt obligations to Elliott.
“Having assumed control, Elliott’s vision for AC Milan is straightforward: to create financial stability and establish sound management; to achieve long-term success for AC Milan by focusing on the fundamentals and ensuring that the club is well-capitalised, and to run a sustainable operating model that respects UEFA Financial Fair Play regulations.
“Elliott fully appreciates the challenge and responsibility that ownership of this great institution entails. Elliott is pleased not only to support the club during this difficult time but also with the challenge of achieving ambitious objectives in the future via the on-field success of coach Gattuso and his players.”
Elliot plans to further inject capital over time and aims to run a sustainable operating model that respects the UEFA Financial Fair Play regulations.