Li Yonghong "looked victorious as he held up an AC Milan shirt outside the San Siro," the Italian club’s home ground and "one of the great cathedrals of European football," according to Sanderson, Fontanella-Khan & Ahmed of the FINANCIAL TIMES. The Chinese businessman was revealed in April '17 as "the new owner of one of the continent’s most successful teams." But Li's takeover "was not all it seemed." Funding for the acquisition "had in part come from high-interest loans" worth more than €300M ($351M) from Elliott Management, the hedge fund founded by U.S. billionaire Paul Singer. This week, "there was no similar grandstanding from Elliott as that debt allowed it to take control of AC Milan." There was "just a terse statement and a promise" to take the club back to "the pantheon of top European football clubs where it rightly belongs." One person involved in the financing talks said, "It was a battle between the meanest and savviest and most aggressive hedge fund in the world and a couple of Chinese guys whom no one had any idea where they came from." The debt arrangement turned AC Milan into a "battleground" between one of the U.S.' "most prominent activist hedge funds and an investor who came to typify the fast and loose spending of new money from China." Another person familiar with the terms of the transactions on the day of the deal, speaking on condition of anonymity, said, "I have no idea how [Mr. Li] is going to maintain the interest payments. Whatever happens, Elliott wins. If he pays, Elliott wins, and if he doesn’t pay, Elliott will seize the club." But if the problems financing the AC Milan acquisition "were clear to those involved in the transaction" a long time before UEFA "was forced to intervene," many are "still puzzled about how the Chinese owners allowed the debt situation to reach crisis point." In the closing days ahead of the loan repayment, sources said, Li had "several opportunities to sell a stake in order to raise the funds." One source said, "Why didn’t he just put in the money on Friday? He has lost €500 million ($585M) in equity." Elliott and AC Milan "declined to comment." Li "could not be reached for comment" (FT, 7/13).
