By Paul Nicholson
December 29 – The increased difficulty of getting Chinese money into Europe to complete club acquisitions has been highlighted with Ligue 1 Olympique Lyonnais owner OL Groupe announcing that it had now received the first €30 million of a €100 million investment by Chinese investment fund IDG Capital Partners. At the same time Dutch club ADO The Hague said it was suing its Chinese owners for €2.3 million in unpaid investments.
The OL deal was agreed back in August and the first payments provided €11.66 million of new shares and €18.34 million new bonds. IDG will pay €100 million for a 20% stake in the club.
IDG s buying at €3.34 per share, 18.5% above their last closing price when the deal was struck. The bonds will be bought at a 60.71% premium above their last traded price. OL Groupe will receive the remaining €70 million “in one or several installments.”
The bulk of the new money will be used to reduce OL debt, mostly incurred building the new 59,000 capacity stadium that was financed by €450 million of private money. The Chinese money will lower OL’s financing costs and allow it to refinance remaining debt. OL Group also said that IDG must hold on to its shares for at least two years.
IDG will promote the club brand in China, Hong Kong, Macao and Taiwan and will get two to three seats on OL Group’s board. The IDG investment could turn out to be a smart investment at the right time in Lyonnias infrastructure. The club is mounting a challenge to the dominance of Qatari-owned Paris St Germain in France where Nice and Monaco currently top the Ligue 1 table. Lyon are fourth but in touching distance of third-placed PSG.
Dutch club ADO The Hague (Dutch D1) have not been so lucky getting the pledged investment money from their Chinese investors and the Dutch FA have place the club on its list of those in financial difficulty.
ADO are demanding more than €2.3 million from its Chinese owner and has filed a lawsuit against Chinese sports events company United Vansen. ADO has also filed a lawsuit against its owner, Chinese businessman Wang Hui. Judges last week suspended him temporarily as chairman of the board of directors of the club and said that his majority shares would be transferred to an independent supervisor.
ADO has been struggling financially for a while. In 2014, United Vansen bought 99% of the shares of the club, but its finances have not turned round.
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