The analysis of Inter Milan by private equity experts

baby, a portal specialized in M&A of private equity funds, analyzed the situation of Inter, in the light of the rumors related to the Saudi PIF fund in recent weeks and beyond.

The debate was triggered by two articles by Libero in recent days, on the new interest on the part of Pubic Investment Fund (PIF), the sovereign wealth fund of Saudi Arabia with approx $ 430 billion in assets under management, according to the SWF Institute, chaired by Mohammad bin Salman bin Abdulaziz Al Saud, Crown Prince of the Saudi Crown and Deputy Prime Minister of Saudi Arabia. The Saudi fund has just returned from the acquisition of Newcastle, flanked by co-investors PCP Capital Partners e RB Sports & Media in a £ 300 million deal.

Against the backdrop of this deal, PIF’s interest in Inter remains, also in light of Suning’s difficulties in continuing to financially support the Nerazzurri club, explains BeBeez. And he also falls into this role Oaktree Capital Management, which received Inter’s shares as a pledge in the € 275 million loan to Suning.

At an economic level, Inter officially announced that, for the year ended June 30, 2021, i consolidated revenues amounted to 364.7 million euros and that one has registered loss of 245.6 million, which mainly contributed to the zeroing of the revenues from the competition deriving from the closure of the stadiums (given that it is compared with 2020 when the closures began in the first days of March), the contractual reductions of the sponsors due to the impossibility of providing benefits by the company and the liquidation of sports relationships.

In the six months which had closed on December 30, 2020 the loss had been contained to 62.7 million, compared to a loss of 32.7 million in the same period of the fiscal year 2019-2020, while the financial statements as at 30 June 2020 had in turn closed with a loss equal to 100 million thanks to the capital gain collected for the sale of Mauro Icardi.

In order to equip itself with the necessary resources to support working capital, last May Suning managed to obtain from Oaktree a loan of 275 million euros a three years at the rate of 9% and precisely guaranteed by the shares of the club in the hands of Suning. The loan was disbursed to Great Horizon sarl, the Luxembourg vehicle with which Suning controls Inter and which will materially pay the money necessary for management into the club’s coffers. As of March 31, 2021, as stated in the Report of the 100% Inter subsidiary Inter Media and Communication spa, the Nerazzurri had received “a ‘cash injection of 50 million euros in the form of shareholder loan disbursed to TeamCo (FC Internazionale, ed)”.

Meanwhile, most of the previous shareholder loans disbursed by Suning to Inter have been converted to capital. In particular, we read again in the Inter Media nine-month report, “in the nine months ended March 31, 2021 was converted a total of € 85.2 million into capital reserve, still leaving a residual amount of 31.9 million (plus accumulated interest of 15.9 million). A further conversion of 23 million euros was conducted in April 2021 ″.

Suning’s problems are therefore two: on the one hand the refinancing of the 375 million bond by 2022 (with the club working on a new 400 million bond) and on the other the expiry in 2024 of the loan guaranteed by Oaktree . And in the event, it is not excluded that in the future Oaktree could also acquire the stake of the controlling shareholder Suning, when Inter were unable to repay the loan at maturity, as already happened in 2018 for Milan. with the relay between Yonghong Li ed Elliott.

Not only that, because, given the cash requirements, the 275 million Oaktree could be burned long before three years and therefore a liquidity problem could be re-proposed well sooner. Hence, therefore, the need to find a financial investor who injects new finance, but this time in the form of equity and not debt. Among the hypotheses was the one that Oaktree entered the club’s shareholding structure with the stake today in the hands of the LionRock Capital fund (31.05%), but in the end it did not happen.

Thus, the Public Investment Fund hypothesis returns to the scene, which as known is the arm that Mohammad bin Salman is using to implement his Saudi Vision 2030, a strategic plan for the transformation of the country launched in 2016 with the aim of renewing its international image and economic model, making it less and less dependent on oil and diversifying investments, thanks to the immense liquidity accumulated with black gold in recent years, much of which has been conveyed to the PIF.

Italy, among other things, is already in the sights of PIF: last August the Saudi fund entered with a minority stake in Horacio Pagani spa, the holding company that owns the entire capital of Pagani Automobili spa, the maker of iconic supercars. The altitude in question is said to be around 30%. PIF thus joined the current minority shareholders in the capital of Horacio Pagani Nicola Volpi (former managing partner of Permira) ed Emilio Petrone (CEO of Sisal), both directly and through their investment vehicle Movidea srl. Volpi is seen as the point of contact between PIF and Inter, considering that the manager between 2014 and 2018 he was a member of the board of directors of Inter, when the main shareholder was Erick Thohir.

Without forgetting, then, the popular shareholding project of Interspac srl, promoted by the economist Carlo Cottarelli. A front from which, the economist hopes, a lot of capital could come, albeit structuring the operation may not be trivial, considering that the Spacs (Special Purpose Acquisition Companies) are listed and this is not yet spoken about for Interspac, while the project is more reminiscent of that of a equity crowdfunding campaign which, however, given the numbers referred to, should necessarily include the publication of a Consob prospectus.

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