(Bloomberg) -- Elliott Management Corp., the investment firm run by billionaire Paul Singer, plans to hold onto AC Milan and run the Italian football club alone -- at least until it’s back on solid footing, according to people familiar with the matter.
The New York-based hedge fund said Tuesday it had taken control of AC Milan, after the club’s Chinese owner defaulted on its debt obligations. Elliott said in a statement its goal was to “achieve long-term success for AC Milan by focusing on the fundamentals and ensuring the club is well-capitalized.”
Elliott won’t consider selling the club or bringing in a partner in the foreseeable future while it works on stabilizing AC Milan’s finances, the people said, asking not to be identified because the details are private. Elliott has said it intends to inject 50 million euros ($58.4 million) in equity to stabilize the club and will add further capital over time to fund the transformation.
A representative for Elliott declined to comment.
Elliott provided last-minute financing for Li Yonghong’s 740 million-euro purchase of the Italian team -- the country’s most successful club at the international level -- from Silvio Berlusconi’s investment company Fininvest in 2017. The firm lent Li 303 million euros to complete the purchase, and provided a further 32 million euros to help the club resolve a dispute with soccer’s European governing body UEFA.
UEFA said on May 22 that AC Milan was banned from European competitions for breaching financial fair-play rules, because of uncertainties around the team’s effort to refinance the Elliott loan. Elliott has said one of its goals is “returning the club to the pantheon of top European football clubs where it rightly belongs.”
Li was due to repay 32 million of the more than 400 million euros of debt accumulated by the hedge fund, including interest, by Friday of last week under the terms of their agreement, according to people familiar with the matter.
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