Suning Need To Raise Almost €700M Over Next 3 Years To Maintain Ownership Of Inter, Financial Outlet Reports

Suning Need To Raise Almost €700M Over Next 3 Years To Maintain Ownership Of Inter, Financial Outlet Reports
June 22, 2021 15:01
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Inter owners Suning face the prospect of having to raise €700 million in order to maintain their ownership of the Nerazzurri.

This is according to Italian media outlet, who report that the mounting debt at the club and the inability to repay it due to a liquidity crisis could leave Suning and the Zhang family’s ownership of the club in doubt.

US fund Oaktree Capital have already made a €275 million loan to Suning in order to stabilize the financial operations at Inter, where the payment of outstanding wages and the servicing of the existing debt burden on the club have been the priority.

Suning will have to pay €340 million to Oaktree in total including interest on the loan within the next three years, to avoid being forced to sell the 68% of the club owned via their holding company Great Horizon, the report continues.

Additionally, they face the prospect of two bonds worth €375 million expiring in December 2022, creating a further debt burden for Suning and Inter to a total of over €700 million.

Inter’s financial situation is not the only economic problem facing Suning in recent years, with the company taking on numerous other loan obligations in China to try and stabilize their parent company through economic difficulties and liquidity crises.

As a result of this, the likelihood that the money to pay off the aforementioned €700 million debt will come out of China is unlikely, leading to the prospect that Suning will not be able to maintain their ownership of the Nerazzurri.

Oaktree’s loan arrangement has an onerous interest rate of 9%, meaning €72 million over the three year repayment period, and the fund has a reputation for earning money through interest on loans to at-risk debtors.

There is a possibility, though it is currently considered remote, that the Zhang family could be forced by their financial circumstances and their loan arrangement with Oaktree to pass the Nerazzurri into the hands of the US fund, in a situation which would resemble Elliott Management’s acquisition of city rivals AC Milan.

By Toni Weeler

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