Elliott Management Corporation has released an official statement regarding Milan, announcing that they are the new owners of the Rossoneri and they are going to ‘inject €50 million of equity capital to stabilize the club’s finance’.
The era of Yonghong Li is officially over. The Chinese businessman completed the purchase of Milan from the hands of Silvio Berlusconi last April, but a lot of the money used for the acquisition arrived via a loan from the American hedge fund Elliott Management Corporation.
Li, however, seems to have run out of money. Last month, Elliott paid €32m to Milan in place of the now-former owner, and Yonghong failed to reimburse them, and is thus forced to give up on the club.
Over the last few days, Elliott has begun the process of taking over the club and this evening (Tuesday), they released an official statement to make their intentions known:
“Ownership and control of the holding company that owns AC Milan has today been transferred to funds advised by Elliott Advisors (UK) Limited (‘Elliott’). This transfer has occurred as a result of steps taken to enforce Elliott’s security interests after the previous owner of AC Milan defaulted on its debt obligations to Elliott.
“Having assumed control, Elliott’s vision for AC Milan is straightforward: to create financial stability and establish sound management; to achieve long-term success for AC Milan by focusing on the fundamentals and ensuring that the club is well-capitalized; and to run a sustainable operating model that respects UEFA Financial Fair Play regulations.
“Elliott fully appreciates the challenge and responsibility that ownership of this great institution entails. Elliott is pleased not only to support the club during this difficult time, but also by the challenge of achieving ambitious objectives in the future via the on-field success of coach Gattuso and his players.
“As first measures, Elliott intends to inject €50 million of equity capital to stabilize the club’s finances and plans to inject further capital over time to continue to fund AC Milan’s transformation.
“Paul Singer, Founder, Co-CEO and Co-CIO of Elliott Management Corporation said, ‘Financial support, stability, and proper oversight are necessary prerequisites for on-field success and a world-class fan experience. Elliott looks forward to the challenge of realizing the club’s potential and returning the club to the pantheon of top European football clubs where it rightly belongs. Elliott also strongly believes in the value-creation opportunity at AC Milan.'”
Elliott manages two multi-strategy funds which combined have approximately $35 billion of assets under management. Its flagship fund, Elliott Associates, L.P., was founded in 1977, making it one of the oldest funds of its kind under continuous management. The Elliott funds’ investors include pension plans, sovereign wealth funds, endowments, foundations, funds-of-funds, and employees of the firm. Elliott Advisors (UK) Limited is an affiliate of Elliott Management Corporation.
It is clear then, that Elliott intends to run Milan for a while before finding a suitable new buyer for the club. Gattuso was mentioned by name in the statement so there are no reasons to question his place in the new Milan of Elliott, but things are less clear about Marco Fassone and Max Mirabelli.
According to Sky Italia, Fassone will fly to London tomorrow to speak with the Elliott representatives. Sky expects the CEO to keep his job but mentions Umberto Gandini (formerly at Milan and now at Roma) and Giovanni Carnevali (of Sassuolo) as possible alternatives to the CEO.
These are certainly interesting times for Milan, who once again changes. All the Chinese members of the board of directions will be removed and soon replaced by people of Elliott Management.