UPDATE 2-Football-Italy: Inter Milan funding deal with Oaktree
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MILAN, May 20 (Reuters) – Italian football club Inter Milan have reached an agreement to secure funding from funds managed by Oaktree Capital Management to help weather the pandemic coronavirus storm, Oaktree said on Thursday.
Inter, crowned Serie A champions this month for the first time in 11 years, have been hit hard by the fallout from the COVID-19 pandemic and club owners have been discussing a deal for months to consolidate finances.
The Chinese retail giant Suning has controlled Inter Milan since 2016 via the Luxembourg vehicle Great Horizon Sarl which owns 68.5%.
As part of the deal, Great Horizon will receive three-year funding of 275 million euros ($ 336 million) from Oaktree, two sources familiar with the matter said.
Some of the funding will be used to buy out LionRock’s minority stake at a later date, the sources said. Hong Kong-based investment firm LionRock owns 31%.
Oaktree would then be expected to secure a minority stake in the club, the sources said, adding that Great Horizon would pledge shares from Inter as a guarantee for the package.
Inter, like rival clubs, face declining revenues due to the pandemic as matches are played in empty stadiums and companies cut sponsorship budgets.
Club CEO Giuseppe Marotta said last week that Inter needed to cut their payrolls to keep their business sustainable amid the pandemic.
The “Nerazzurri” recorded a loss of 102 million euros during the fiscal year ended June 30.
($ 1 = 0.8184 euros) (Reporting by Elvira Pollina and Elisa Anzolin, additional reporting by Francesca Landini, written by Stephen Jewkes, edited by Ed Osmond)