Gerry Cardinale’s recent trips to the Middle East have faced speculation. However, today, news has come to light about the reasonings and significance to AC Milan his trips may have.
When RedBird agreed to the €1.2billion takeover with the Elliott Management for the club in 2022, only half of the sum was paid up front, leaving a further €600million to be raised with a deadline of 2025 through the form of a vendor loan.
Whilst Cardinale has already been paying this slowly back, he has been determined to tempt potential investors into contributing to repaying the loan, to attempt to repay the amount before the deadline, as reported by PianetaMilan.
Cardinale has frequently travelled to both the United States of America and the Middle East to seek investment – given Milan already has strong connections to both regions – and would only be interested in seeking investment. The idea of a complete sale is completely off the table, as is the idea of welcoming new shareholders.
The report adds that the fund involved in talks with Cardinale is not the Bahrain-based group Investcorp, who also did not want to officially comment on the speculation. Cardinale’s will, as mentioned, is to pay off the ‘vendor loan’ to Elliott.
Something isn’t adding up. He wants others to invest but not create new shareholders. This puts the risk back on him as he needs to sell them on something better than a 7% rate of return for it to be economically feasible to both him and the investors. It would have been easier to mitigate risk through shares as during the good time all will benefit but during the downtime they all share in the losses (instead of having to pay out an agreed upon percentage or fixed rate of return).
Also he’s been asking around for money for a while now. Maybe Milan is just not that attractive to investors (key word here, not ppl who want a shiny toy) or the partners he regularly does business with eg Fenway also don’t buy the potential trajectory…. because you’d think that’s where the money would have come from instead of external entities.
Even though i agree that it sounds a bit dubious considering if its not a sale or for that matter adding new shareholders maybe they could be selling naming rights for a duration of time for maybe the stadium or the new area or something but that would basically be like selling the hide before the bear is shot. Otherwise unless its a loan as suggested i also have a difficult time to see what sort of investment they are looking for.
There’s no reason I can think of that someone would just want to flow money into Milan that’s not part of their set of companies associated with Gerry. Eg naming rights doesn’t make sense unless it’s say the PIF and they want to bankroll the club…in which case they’ll just buy the club or it would make sense to do so.
Gerry has a serious issue with the amount of the loan and the paying it back by 2025.
“Gerry has a serious issue with the amount of the loan and the paying it back by 2025.”
Compare that to the situation of Inter and you’ll realize there’s no such thing as “SERIOUS issue” here… 😀 😀 😀
Haha true 😂
I will agree with bb here because its different kind f money and for what we know he can just sell a bunch of players to pay those loans, leao, theo and maignan should be able to fetch 250-300 mil, throw in a few players on top of that and its gone from what i can recollect.
If he doesn’t want to welcome a new shareholder at Milan, it means the investor will invest at Redbird instead of directly at Milan. Redbird will then use the invested money to pay the loan.
Yes but why 🤷♂️. Unless they get a lower rate of return than the loan rate (which also doesn’t make business sense) this doesn’t favour Gerry. Gerry has to pay 600m back plus 7% interest so he needs to ask for 600m plus 7% to avoid default and then promise a rate of return that makes sense to the investor (which is likely around another 5-10% given the bank premium.was about that as a gauge).
If they invest 600+ at Milan, Redbird (and Cardinale) will lost control of Milan. However, if they invest 600+ at Redbird, Cardinale still control Redbird (and Milan). This is because Redbird value is more than Milan so 600+ can get majority of Milan but not Redbird.
Elliott fund sold the club for 1.2bn and granted a vendor loan in half of that sum with 7% interests. Deadline 2025. They make big bucks off interests and if Gerry defaults they get the club back in their hands.
Are they pulling a Yonghong Li on his arse? Although I hate Gerry and his fart sniffers, that’s just evil.
Elliot is a known vulture firm. It’s been known for decades now. Anyone that takes a loan from them is somewhat desperate.
Exactly!
A scenario of Yonghong Li may be waiting for Gerry Cardinale & Redbird.
Given the hike of interest rates in USA, Europe and the rest of the world, he can’t get any cheaper loan than 7% ones he owes to the vulture Elliott.
No, if Gerry cannot pay, the share equal to the unpaid loan will return to Elliot. Gerry will keep the share equal to what he already paid which is already more than 50%. The loan agreement is different from the loan to Li Yonghong.
Yeah you’re right
That would be Gerry pulling a Yonghong Li on himself! Biting off more than he can chew..
jerry corleone just send fredolani to middle east with offer that can’t be refuse, he got answer with a stinky dry fish
Awful news, please sell and leave now. I can’t handle these guys here for too long.
Not now, finish the 70k+ stadium first.
Broken Gerry does NOT even have the money to pay back 600M loan, let alone the money to build a 70k+ stadium.
Just take a look of the financial news to see how many real estate companies have gone belly up or cutting down their business and lay off workers due to high interest rates.
It’s just PR/propaganda from Redbird.