Inter Said to Near $336 Million Bailout Deal With Oaktree

(Bloomberg) -- Oaktree Capital Group is set to buy a minority stake in FC Internazionale Milano SpA as part of a 275 million-euro ($336 million) deal aimed at shoring up the Italian soccer team’s troubled finances.

The U.S. fund is close to buying about 30% of Inter owned by the Hong Kong-based private equity firm LionRock Capital Ltd. and to provide a much needed loan to the team, said people familiar with the matter who asked not to be named before an official announcement.

Inter’s 283 million euros of bonds due 2022 gained about half a cent on the euro to 99 cents, the highest level since February, according to data compiled by Bloomberg.

The move could eventually lead the U.S.-based fund to take full control of the soccer team from its Chinese owner, the conglomerate Suning Holdings Group Co., the people said. An announcement is expected as soon as Wednesday with LionRock’s Tom Pitts resigning from the soccer team’s board, the people said.

Representatives for Inter, Oaktree, LionRock and Suning declined to comment. Final talks are ongoing and could still fall apart, the people said.

Pressure is mounting on Inter Milan to shore up its finances following the collapse of the Super League project, which held the promise of injecting more 300 million euros of cash into the Italian team. The club has failed to pay regular salaries to its players in recent months, highlighting its strained situation. It also asked players to give up of a part of their annual salary, Italian media including Il Corriere della Sera reported.

Inter recently won the Italian top league title, also known as “Scudetto,” for the first time in more than a decade. That crashed with the company’s financial situation that risks spilling over into the planning of the next season, including possible player transfers.

Inter Milan has been for months in financial dire straits, especially after some of its Chinese sponsorship payments dried up at the end of last year, Bloomberg reported first last month. Private-equity firm BC Partners had already walked away from a deal following doubts about the longer-term stability of the Chinese payments, people familiar with the talks said in March, asking not to be identified discussing private deliberations.

Oaktree will initially partner with Suning to revamp Inter’s finance. If Suning isn’t able to repay its debt after three years, the loan could turn into equity letting the U.S. fund get control of Inter Milan, the people said. It would be the second time in a few years that a North American financial firm ends up owning a top Italian football team.

In 2018, Elliott Management Corp. gained control of AC Milan, Inter Milan’s local city rival, after its Chinese owner -- the little known businessman Li Yonghong -- failed to repay debt owed to the U.S. investor. Li had bought Milan from media mogul and former Italian Prime Minister Silvio Berlusconi.

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