Associazione Calcio Milan spa (AC Milan) soccer team and its parent company Rossoneri Lux are in exclusive talks with a unique subject for 8 weeks in order to refinance 308 million euros of debt which is due at the end of October 2018. The news was anticipated to Corriere della Sera last weekend by Lorenzo Gallucci, director of BGB Weston, a London-based advisory company who has received the exclusive andate to find a counterpart for the refinancing. AC Milan’s Marco Fassone confirmed the news yesterday at Milan’s shareholders meeting, without telling the name of the counterpart.
If the debt is not repaid in time, debt’s subscriber Elliott fund will become the new owner of the soccer team. Actually last May AC Milan listed two bonds on the Wiener Boerse for total value of 128 million euros, both paying a 7.7% fixed coupon and maturing in 18 months (see here a previous post by BeBeez). A Series 1 bond has been issued for 73.7 million euros, while a Series 2 bond has been issued for 54.3 millions. Proceeds from the first bond have been used to repay the oustanding debt while proceeds from the second bond were to be used to finance shopping of new soccer players for the team. AC Milan was advised by Studio Gattai, Minoli, Agostinelli & Partners law firm for the deal.
The two bonds were entirely subscribed by Paul SInger‘s Elliott Fund (through the spv Project Redblack) and are part of a 308 million euros financing package that the fund has issued to the new AC Milan’s owner, the Chinese broker Yonghong Li, for acquiring the soccer team. The remaining 180 million euros are instead an 18 months loan issued to Rossoneri Lux and paying an 11.5% fixed coupon. All that after last April Yonghong Li had acquired the company for a 520 million euros equity value or a 740 million euros enterprise value, including 150 million euros of banking debt and a 100-120 million euros capital increase that he committed himself to subscribe.
The shareholders meeting was approving Milan’s FY 2017 financial statements having moved the FY close date to June 30th from December 31st. So FY 2017 is made just of six months.
In the six months 2017 AC Milan posted a 32.6 million euros loss after having lost 34.6 million euros in the six months 2016 and about 75 millions in the whole 2016 year (in 2015 the soccer team lost 89 millions, see here an analysis by Leanus, after free registration and login). All that after revenues dropped to 102.9 millions from 127.6 millions in the six months and costs dropped to 129.7 millions from 153.3 millions.
Lawyer Roberto Cappelli, AC Milan’s shareholders meeting chairman, yesterday said that Mr. Li had invested already 49 million euros our of a total of 60 millions of a first capital increase and that he is committed to subscirbe another 60 millioneuros capital increase if needed.
Milan’s ceo, Mr. Fassone, also said that the company aims at the breakeven point in 3 years and that mulls ipo on an Asian Stock Exchange in 2020.