March 16 – It would be the biggest Chinese acquisition of a European football club to date, but it now looks like it could end up the most expensive €200 million football folly of all time.
Silvio Berlusconi’s slow to complete €740 million sale of AC Milan sale to the Sino-Europe Sports Investment Management Changxing Co looks to be in danger with one of the major partners in the investment group, Haixa Capital Management, reportedly pulling out after failure to win support from Chinese government to complete the deal.
This leaves lead investor Li Yonghong, who has already put up €200 million in non-refundable deposits, having to either fund the rest himself or find new investment partners, reports Bloomberg.
The sale was meant to close at the end of 2016 but was pushed back to end February 2017. When that deadline passed there was talk of a further €100 million non-refundable deposit being negotiated between the two parties, with Berlusconi also saying that he believed the Chinese would come up with the money but that he was prepared to keep the club if they didn’t.
It was a sentiment echoed by his son Per Silvio Berlusconi, chief executive officer of media business Mediaset, which like the football club is controlled by Fininvest, who said: “If Chinese investors step back it wouldn’t be emotionally pleasant for my father, but it wouldn’t be seriously damaging since the fine for backing out of the deal is substantial.”
Bloomberg reports that Sino-Europe Sports and Fininvest are currently locked in negotiation over a new deal that could involve a further €100 million deposit, as well as new investors. That deal would likely close in mid-April.
Haixia Capital is controlled by China’s State Development & Investment Corp., and has been held back from investing by a change in government policy towards football investments that have been described as “irrational” and even against the nation’s industrial policy.
Chinese authorities have reportedly blocked Sino-Europe Sports from transferring funds out of mainland China to buy AC Milan.
Berlusconi has previously said that if the Chinese failed to complete on the deal then he would rebuild the club around a core of young Italian players.
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