As Yonghong Li seemingly won’t reply to Milan calls, the Financial Times outlined how Elliott Management’s takeover was inevitable from the start.
According to La Gazzetta dello Sport, Milan directors have repeatedly tried to contact Yonghong Li and his advisors to get some instruction on what is happening, but he is refusing to answer any calls.
Meanwhile, the Financial Times has outlined the seeming inevitability of Yonghong Li losing the club after agreeing bizarre business terms.
To the bitter end it was confusing, as Yonghong Li only had to pay back €32m to keep himself in charge, yet failed to sell majority shares to several different potential buyers.
This included Rocco Commisso, who was frustrated at the refusal of Yonghong Li to sell on favourable terms.
“Why didn’t he just put in the money on Friday? He has lost €500m in equity,” someone involved in the talks told the FT.com.
“For an Anglo Saxon or even a Latin investor, this would have been a total disaster; instead the Chinese were sitting round discussing details that were totally irrelevant, like the IPO of the club in 2024.”
Monaco’s Russian patron Dmitry Rybolovlev apparently had organised a deal with Yonghong Li, but only after the €32m repayment deadline had passed.
“The situation was so chaotic. People — bankers, lawyers, advisers — had been working on this for six months and in the end came out with zero,” said one person involved.
The 11 per cent interest loans with US hedge fund Elliott Management were always set up to fail, according to someone who spoke to the Financial Times.
“I had to read the contract three times. I thought it was science fiction. I had not seen anything like it in my life. I could not believe anyone had signed it.”
The debt was a ‘payment-in-kind’ loan, allowing Li to pay interest with more debt rather than straight-up cash. That meant the longer the debt stood, the more debt built up.
Attempts for months to refinance the deal in London were rejected, as nobody was prepared to take on this type of high-risk structure.
As has been reported many times over the past year, there were always huge doubts over who Yonghong Li was and where he got the funds to purchase Milan.