Inter Milan’s Chinese owners are scrambling to collect at least $ 200 million in emergency cash, after the Italian soccer club’s financial situation deteriorated due to the epidemic and massive spending on top players.
Suning Holdings, the Chinese retailer that owns a majority stake in the Premier League team, Serie A, is seeking new investments by the end of the year in response to a financial crisis at the club, according to three people familiar with his finances.
Sunning’s challenges with Inter Milan come as the retailer, backed by “Alibaba”, is facing questions about its heavy debt burden in China.
The club held exclusive discussions with the private equity group BC Partners in recent weeks about a potential investment, but those talks ended after the two sides were unable to agree on the valuation, according to the “Financial Times” and seen by “Al Arabiya.net”.
The Nerazzurri – the Inter Milan title – faced a cash crisis over the past year, as the club suffered pre-tax losses of 102 million euros last season due to lack of revenue caused by the pandemic.
The owner faltered
Meanwhile, Sunning faces financial pressures in her native China, which has made it difficult to continue financing the Italian club, including the recent crackdown by Chinese authorities on capital outflows.
While Sunning was able to pay off $ 1.5 billion in debt late last year, its remaining liabilities amount to another $ 1.2 billion in bonds due this year, representing more than half of the total debt burden owed, according to data from Dealogic.
The club continues to talk to BC Partners as well as other potential investors, including troubled debt funds such as Ares Management and Fortress Investment Group, owned by Softbank, and others who have been monitoring the situation include Swedish private equity group EQT and US company Arctos.
Those conversations range from discussing direct club takeover or buying a minority stake, according to several people familiar with the ongoing discussions.
Sunning has also appointed Global Investment Bank Goldman Sachs as financial advisor to raise financing.
Dispute about evaluation
Negotiations with BC Partners have faltered over the club’s valuation, the sources said, with Suning believing it is worth more than 900 million euros, equivalent to $ 1.08 billion, and two people familiar with the discussions said BC Partners estimated the group’s value at only 750 million euros.
A person close to the club leadership said Suning is committed to providing financial support to the club during this year and believes it will resort to selling a stake in the shares, even if that means incurring a loss in its investment, rather than allowing the club to go bankrupt.