Milan Football Club plans to be listed on the Hong Kong Stock Exchange, the Financial Times (FT) reported, citing sources.
In August 2016, a consortium of Chinese investors signed a preliminary agreement with Fininvest of the family of former Italian Prime Minister Silvio Berlusconi to purchase Milan. The deal was scheduled to close before the end of last year, and Chinese investors were to participate in the purchase of the famous football club through Sino-Europe Sports Investment Management Changxing, Fininvest reported. Investors included the China Development and Investment Corporation (SDIC), investment company Haixia Capital and Yonghun Li, chairman of Sino-Europe Sports. Lee was called the main investor. However, the deadline for closing the deal had to be extended.
In February 2017, the General Directorate of Sports warned Chinese companies about the risks of irrational overseas investment, especially in entertainment and sports. At the same time, the Chinese authorities blocked the transfer of funds for the transaction, Bloomberg reported. In addition, Haixia Capital pulled out of the deal after criticism from Chinese officials. The deal was saved by the fact that the American hedge fund Elliott Management agreed to provide part of the financing for the purchase of the football club for 740 million euros, the FT reported.
Elliott, according to FT, will provide financing to Lee’s firm Rossoneri Lux in the amount of 253 million euros for the deal. Of these, 180 million euros will go to settlements with Fininvest, and 73 million euros will be lent to the Milan football club for payments on short-term loans, two knowledgeable sources told FT. According to Reuters sources, an additional € 50 million will be invested directly in the football club.
Lee plans to list the Hong Kong football club in the next 18 months to allow Elliott Management to sell its stake, the FT cites sources familiar with the negotiations.
Chinese investors have already paid out € 250 million in four tranches to Fininvest, Reuters reported. In addition, Sino-Europe Sports has already paid a € 100 million non-refundable deposit. Now it is expected to close the deal to buy the famous football club by investors from China in mid-April, the FT points out.
Berlusconi has owned Milan since 1986, and since then the red and blacks have won the Italian championship eight times, won the Champions League five times (most recently in 2007) and the UEFA Super Cup five times. Over the past few years, the media have reported on Berlusconi’s attempts to sell the club. So, in 2015, he even signed an agreement of intent to sell 48% of FC Milan to Thai businessman Bi Techaubol. But then the entrepreneur also failed to attract funding for this transaction.
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