Inter Milan owners Suning have reportedly seen their debt to Oaktree Capital increase to just under €330 million.
In May 2021, Suning opted took out a loan worth around €275 million from US-based group Oaktree Capital. The interest rate was around 12%. Suning took out the loan via their holding company Grand Tower SRL.
The purpose of this loan was to secure Inter’s operative costs for three years starting in May 2021. Suning must repay the debt in full, including the interest owed, by May 2024.
However, as Calcio e Finanza explains, this could become an even more challenging task for the Nerazzurri owners.
As reported, this type of loan agreement sees the interest accumulate year after year based on the capital amount, regardless of the initial value of the loan.
Inter Milan Owners Suning Debt To Oaktree Rises To €330M
The report claims that on December 31st 2022 the total amount that Suning must cover by May 2024 has now reached €329.6 million. This is a significant rise from December 2021, when the amount had been 292.1 million.
Moreover, the source believes that the two parties could reach a settlement where Suning and Oaktree decide to refinance the terms of the loan.
This follows reports detailing why Suning and Oaktree could agree on refinancing the loan agreement.
If agreed upon, a new loan agreement replaces the current loan agreement, most likely at a lower interest rate.
Furthermore, it is reported that Suning have set aside €57 million in a risk provision or risk funds. This is in case they are able to repay the entire loan before the due date in May 2024.
However, it is important to note that should Suning default on repaying the loan after failing to refinance the loan owed to Oaktree by May 2024, then Oaktree would assume control of Inter.
This is similar to how Elliott Management came to take over AC Milan in 2018.
Thus, Oaktree would be able to take over the company’s shares in the club to become Inter’s majority owners.
