Oaktree takes over Inter Milan after Chinese owner misses payment

Oaktree Capital Management, a US investment fund, announced the acquisition of Italian football champions Inter Milan after the club's Chinese majority shareholder failed to make a 395 million euro ($428 million) payment.

The loan, granted by Oaktree in 2021 to the Luxembourg-based vehicle through which Chinese conglomerate Suning (002024.SZ) controlled Inter, was guaranteed by the stake in the club.

This gave Oaktree, which specialises in providing rescue funding to struggling businesses, the potential right to take over the club in the event of a default.

"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," it said in a statement.

According to a source familiar with the situation, Oaktree, which has had little prior experience with sports franchises, has no plans to sell Inter right away and is willing to be a "patient investor."

The turmoil off the pitch contrasts with the club's success on it, as Inter won their 20th Serie A league title last month, and their second under Suning's ownership.

Inter, founded in 1908, is a traditional powerhouse in Italian football, boasting top players such as Lautaro Martinez and Nicolo Barella.

Suning made no immediate comment, despite purchasing a majority stake in the club in 2016 in one of the most high-profile forays by a Chinese company into European football.

Since then, Chinese authorities have restricted overseas sports spending, and Suning has been hit by the COVID-19 downturn.

That prompted Suning three years ago to obtain a 275 million euro emergency financing package from Oaktree, with a 12% interest rate, which assisted Inter in weathering the pandemic crisis.

In a letter to fans published on the club's website on Saturday, Inter Chairman Steven Zhang, the 32-year-old son of Suning's founder Zhang Jindong, warned that the club's stability was jeopardised after negotiations with Oaktree failed.

In an Instagram message, the hardcore Inter fans group Curva Nord praised Zhang's leadership and thanked him for "his contribution to the history of Inter, and the successes achieved" by the team.

Inter lost 86 million euros in the fiscal year 2022-2023, despite reaching the Champions League final.

Oaktree's move is similar to the acquisition of Inter's local rivals AC Milan by US hedge fund Elliott Management in 2018. Elliott took over AC Milan after Chinese businessman Li Yonghong missed a payment.

Elliott eventually sold AC Milan to RedBird Capital Partners for 1.2 billion euros four years later.

SportsLigue