Debt deadline looms for Italian champions Inter Milan

Debt deadline looms for Italian champions Inter Milan

May 21, 2024 at 2:15 PM
Inter Milan were crowned champions on Sunday but could be repossessed this week
Inter Milan were crowned champions on Sunday but could be repossessed this week. Photo: Marco BERTORELLO / AFP/File
Source: AFP

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Inter Milan could change hands days after being crowned Italian champions as Tuesday's deadline for a near 400 million-euro debt repayment rears into view.

Simone Inzaghi's Inter team held aloft the Serie A trophy after Sunday's meaningless 1-1 draw with Lazio having already secured the league title with five matches to spare last month.

But a planned weekend of celebrations was overshadowed by the prospect of one of Europe's biggest clubs being taken over by US investment fund Oaktree, who are waiting on 395 million euros ($429 million) from Inter's Chinese owners Suning.

Suning borrowed 275 million euros at over 12 percent interest three years ago to pay staff and players as the Covid-19 pandemic ravaged the finances of clubs across Europe.

Inter were put up as collateral against that debt and Oaktree could decide to claim control of the club when the debt matures, with a source familiar with the matter tell AFP that Oaktree had not yet received "a single euro".

Inter posted losses of 85 million euros in the 2022/23 season, following even heavier losses of 140 million euros and 245.6 million euros in the previous two seasons as stadiums were partially or fully closed due to the pandemic.

On Saturday, Inter president Steven Zhang, the son of Suning founder Zhang Jindong, had claimed that Oaktree, who manage $192 billion in assets, were "jeopardising" the club's financial stability with unspecified legal threats.

Zhang, who hasn't been to Italy over a year and lost a court case with China Construction Bank over personal debts of 320 million euros, claimed that Oaktree had been actively obstructing negotiations for full repayment.

He had been widely reported as negotiating a further 430 million euro loan with another US fund, Pimco, to pay off Oaktree.

But the source told AFP that no documents had been exchanged that suggest Suning had found either a credible buyer for Inter or a refinancing partner.

As a result, Inter are increasingly likely to end up in the hands of Oaktree in manner similar to the way another US fund, Elliott Management, took control of their local rivals AC Milan in 2018.

Elliott became Milan's owners when Chinese businessman Li Yonghong was unable to repay a loan he had taken out when he bought the club from the late Silvio Berlusconi's Fininvest the previous year.

An announcement is not expected on Tuesday, but if repayment is not made and Oaktree decide to take control of Inter, the source said, the takeover process will not be lengthy.

A banner which read "Thanks Steven", was displayed in the San Siro stands on Sunday after Inter claimed a second league title in four years, while the club's sporting CEO Giuseppe Marotta insisted that situation was "stable".

Inter have become a powerful force on the pitch, at home and abroad, with seven trophies and two European finals since Suning acquired the club in 2016.

AFP photo