After months of complex negotiations, the Inter of president Steven Zhang, led by the Corporate CEO Alessandro Antonello, signed the loan agreement with the US fund Oaktree. The fund does not enter the club’s capital. The shareholding remains the current one with Suning at 68.5% majority shareholder and Singapore’s Lion Rock fund just over 31%. However, club dues serve as collateral for funding to be repaid or renegotiated within three years.
Operation of 275 million euros
From a technical point of view, the North American fund will finance the Luxembourg-based parent company Great Horizon owned by Suning. This will hold about 35 million and will pay the remaining 240 million in more tranches into the club’s coffers to meet the financial needs of this and next season. So far, Sunnig had directly financed the Nerazzutto club in this way with almost 320 million, then progressively transforming the membership loan into a capital injection for over 90% of the sums in order to support the net worth.
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Debt exposure of 425 million
During the summer and in any case by the end of the year, Inter will have to refinance the 375 million bonds plus an RCF credit line (Revolving Credit Facility) for 50 million that expire in 2022. The goal is to move the repayment deadline to 2025 or 2026. In this way, the overall debt of the club also considering the oprative debt exposures with suppliers for another 50 million approximately, net of receivables, it is approximately 475 million.
Salary cuts between 15 and 20%
Inter have already paid the salaries for January and February 2021. They will have to pay the March salaries by June according to the new deadline set by the FIGC. In the next few days, the salaries for November and December 2020 will be paid, postponed to May with an agreement with the players. We are talking about about 30 million before taxes. While waiting for the revenues to be shared, Inter will have to work like all the top clubs (and not only) to lower the cost of staff which is currently worth between salaries (195 million) and depreciation (130 million) 325 million. The management’s goal is to cut these costs by between 15 and 20%. The next transfer market that will be conducted by looking at the balance between income and expenditure services also to this together with further individual agreements with the members.
Revenues to be increased
Inter were the team most penalized by the pandemic in Italy. The closure of San Siro caused a shortfall between tickets, season tickets and corporate hospitality fees of approximately 70 million. In addition to the reopening of the plant next season, the priority will be to focus on finding the new main sponsor in place of Pirelli. At the moment there is no negotiation started, but only some expressions of interest. The target is no less than 25 million. Inter, which in the pre-Covid era had achieved a structural turnover, net of capital gains, of around 360 million needs to quickly increase revenues towards 400 million. For this it will be necessary to replace some Chinese contracts that have expired and above all to start the new San Siro operation. Without which, in the long run, all refinancing or rebalancing operations could prove useless if we want to stay at certain levels in Europe.