So far this season Inter have had the upper hand over their city rivals Milan on the pitch. Ahead of them in the league and Mauro Icardi’s hat trick helping them to a 3-2 win in the Derby della Madonnina in October. But it would seem that it’s not only the on pitch battles that Inter are winning against their fierce rivals.
Inter’s big money bond has seen a cash injection into the club whereas Milan are struggling to find investors to refinance their €300 million plus of high interest loans they took on last summer from US hedge fund Elliot Management. It is reported that if Milan are not able to refinance their loans by next October the club will be taken over by Elliot Management who will seize control of the club. It is thought to be 50-50 if a deal is made or not. This is another blow to Milan who recently had their Financial Fair Play Voluntary Agreement denied by UEFA amidst concerns over the club’s financial situation.
On the other hand Inter’s €300 million bond deal is the first public bond sale of a European club since Manchester United did the same back in 2010. These contrasts in fortunes of the two clubs highlights the pros and cons of selling to foreign owners in the modern game. Milan took on their debt in the summer when the relatively unknown Chinese investor Li Yonghong bought the club from Silvio Berlusconi for €740 million. Very little is know of Mr Li’s wealth which is proving to be an obstacle in Milan’s attempts at finding potential investors.
Inter is now majority owned by the Chinese retail firm Suning. The were sitting pretty at the top of the Serie A table when the bond was sold. One investor said it was hard to see Inter defaulting on their debt if they remained in Italy’s top league, considering Inters’ history of never being relegated to Serie B it’s hard to see that possibility happening anytime soon. As well as repaying debts this bond is set to provide the club with a cash injection of €82 million.
However it’s not all plain sailing for Inter either. The bond is closely linked to strong discipline of money management by Suning. This is due to the strict prohibitions dictated to them by the Chinese government. In January they will be forced into a more creative strategy in the transfer market and will also be faced with the question of President Erick Thohir’s ‘golden handshake’ fee thought to be in the region of €200 million.
