Oaktree Capital Management has taken over Italian champions Inter Milan after Suning defaulted on its debt to the U.S. fund.
Chinese conglomerate Suning — who purchased a 68.7 per cent stake in the club in 2016 — took out a €275m loan at 12 per cent interest to support the club during the COVID pandemic three years ago and the outstanding amount has ballooned to almost €400m.
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Inter’s outgoing president Steven Zhang tried to source refinancing packages with other lenders including the investment management firm, Pimco, to no avail.
Over the weekend, he released a strongly-worded statement to “address the speculation concerning our club’s financial stability” before accusing Oaktree of “a lack of meaningful engagement” on Suning’s efforts to help the fund “achieve full and immediate financial return.”
Oaktree confirmed the takeover in a statement which read: “As of May 22, funds managed by Oaktree Capital Management, L.P. (“Oaktree”) have assumed ownership of FC Internazionale Milano. This follows the non-repayment of Oaktree’s three-year loan to Inter Milan’s holding companies that matured on 21 May 2024 with a total balance due of approximately €395m.
“In May 2021, with Inter Milan forecasting record financial losses during the 20/21 season, Oaktree provided its holding companies with rescue capital to stabilize the Club’s financial situation and enable it to continue operating, including to pay its players and employees.
“In the three years since Oaktree’s rescue financing, Inter has lifted its eighth and ninth Coppa Italia, secured its sixth, seventh, and eighth Supercoppa, earned its 20th Scudetto title and historic second star, and reached the UEFA Champions League final for the first time since 2010.
“Oaktree is dedicated to achieving the best outcome for the long-term prosperity of Inter Milan, with an initial focus on operational and financial stability for the Club and its stakeholders. Oaktree values the legacy of the Club, the passion of the players, the loyalty of the Interisti, and the Club’s significant role in Milan, Italy and the global sporting community.
“Oaktree is committed to working closely with Inter Milan’s current management team, partners, the league and governing bodies to ensure the Club is positioned for success on and off the pitch; focusing on robust management, operations and governance with a vision for sustainable growth and success.”
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Oaktree also stated that they and Inter Milan’s management team will communicate with key stakeholders in the coming weeks to ensure there is a smooth transition.
Oaktree granted the loan to Suning in 2021 on the understanding Zhang would have time to sort the club out and realise a sale. But despite the retention of investment bank Raine to lead a sale process Inter have remained unsold.
In the absence of the repayment of the loan, Oaktree has enforced the debt and taken Suning’s majority share of Inter in kind. For now the day-to-day running of the club is to stay unchanged.
Suning took control of Inter Milan in 2016, in one of the highest-profile forays of a Chinese firm into European football.
Inter won their 20th league title in April with a historic victory in the derby against rivals AC Milan. It was the sixth and final trophy of Suning seven-year ownership.
Simone Inzaghi’s side have amassed 93 points this season, scoring 87 goals and conceding just 20.
They close out their campaign at Verona on Sunday.
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(Photo by Jonathan Moscrop/Getty Images)