US hedge fund Elliot has launched contractual proceedings that could enable the investment company to determine the future of stricken Italian soccer giants AC Milan, according to a report from the Reuters news agency.
Last year, Elliot lent money to Li Yonghong allowing him to complete the takeover of the Serie A club from Silvio Berlusconi, the country’s former prime minister. Elliot then provided additional money to help fund player transfers and repay the club’s debts with banks.
Li, who owes Elliot €32 million (US$37 million), missed Friday’s deadline to repay the company, paving the way for the firm to take control of AC Milan. Reuters says the process began on Monday, with Elliot installing its own managers on top of a Luxembourg-based holding chain overseeing AC Milan, effectively taking over control of the club.
Sources close to Reuters added that the final step of the process could see Elliot become the majority owner of the seven-time European champions. It has been reported in the past that the hedge fund is not interested in managing a soccer club in the long term but might seek to sell AC Milan on for a profit after sorting out their financial troubles.
Meanwhile, another source has said that Li is said to be looking for ways to reimburse Elliot by bringing in other investors and remaining a minority shareholder.
AC Milan reportedly closed the financial year to the end of June with a loss of €75 million, and recently received a one-year suspension from the Uefa Europe League for breaching Financial Fair Play (FFP) rules.
The Rickets family, which owns Major League Baseball (MLB) team the Chicago Cubs, is one of the rumoured parties thought to be interested in acquiring a controlling stake in AC Milan, who declined to comment when contacted by Reuters.