In less than two months, Inter Football Club faces a critical juncture in its recent history, confronted with the imperative task of resolving the impending deadline associated with its loan agreement with Oaktree Capital Management.
By the culmination of May 20th, 2024, Mr. Steven Zhang, the President of Inter, is obligated to settle a sum of approximately €375 million to the aforementioned US-based investment firm. This sum encompasses the principal loan amount of €275 million alongside accrued interest totaling around €100 million. Failure to meet this financial obligation necessitates either the renegotiation of terms or cedes control of the club to Oaktree Capital Management.
As reported by La Repubblica, Oaktree’s management has recently rebuffed a renegotiation proposal from Mr. Zhang, disinterested in extending the repayment deadline by an additional year while also augmenting the interest charges. This decision is motivated by the assessment from the insolvency office in London categorizing the loan as a ‘high-risk’ venture, indicating uncertainty regarding its repayment.
Should Mr. Zhang and Oaktree Capital Management fail to reach a mutually acceptable arrangement, the ownership of Inter Football Club will confront two plausible courses of action.
The initial option entails procuring a new loan of €400 million from an alternate financial entity to settle the outstanding debt by May 20th. Discussions involving advisors from Goldman Sachs and Raine Group have been initiated with potential lenders. However, expeditious progress is imperative, given the intricate nature of such financial transactions.
Alternatively, the second recourse involves Oaktree Capital Management assuming ownership of the club, displacing Mr. Zhang and Suning Holdings Group. This transfer of ownership may entail the conversion of a significant portion of the debt into equity shares or the enforcement of contractual pledges. Oaktree Capital Management, with an intent to divest its interest, would actively seek new buyers expediently.
Notwithstanding the impending developments, Mr. Beppe Marotta, the Chief Executive Officer of Inter Football Club, appears to be secure in his position. His tenure extends until June 2027, underlining his esteemed reputation for managerial prowess and expertise, thus mitigating concerns regarding his potential vulnerability amidst the ongoing negotiations.