It’s reported Milan made a €32.6m loss in the first six months of 2017, a slight improvement on last year.
The Rossoneri were taken over by a Chinese consortium led by Yonghong Li in April, and they decided to switch the accounting period to cover the football season.
As a result, the club’s accounts will now cover July 1 to June 30 every year, with a shareholders’ meeting on November 13 to approve the accounts from January 1 to June 30, 2017.
It’s reported Milan made a €32.6m loss in the first six months of 2017, a slight improvement on last year.
The Rossoneri were taken over by a Chinese consortium led by Yonghong Li in April, and they decided to switch the accounting period to cover the football season.
As a result, the club’s accounts will now cover July 1 to June 30 every year, with a shareholders’ meeting on November 13 to approve the accounts from January 1 to June 30, 2017.
Reuters states that it has seen these documents early, and that they show a loss €32.6m, a slight improvement on the first six months of 2016.
The financial year for 2016 ended with a €75m loss.
However, a big summer transfer campaign will see a bigger loss at the end of the season, as Reuters reveals in a quote from the documents.
“The transfer campaign resulted in a negative balance of €126.5m for the fiscal year 2017, as a result of the investments made in this period,” the financial report says.
The takeover by Li’s group was funded by loans from US hedge fund Elliott Management, who can take control of the club if they aren’t repaid.
As a result, the club will seek “renegotiation of the financial debt expiring in 2018”, with an announcement that “discussions with some financial institutions have begun, and the directors are confident that they can finalise the refinancing of the financial debt, as part of a more complex operation involving the refinancing of the debt of Rossoneri Sport Investment Luxembourg”.
Rossoneri Sport Luxembourg is the name of Yongong Li’s company, which received €180m from Elliott to finance the takeover, with an interest rate of 11.5 per cent.
There was also a €74m intercompany loan used to repay previous holding group Fininvest and, in turn, the banks which carries an interest rate of 7.7 per cent.
The accounts also show a third loan from Elliott, at 7.7 per cent, of €54.3m to fund the summer transfer campaign. That had been completely used when the accounts were drawn up on October 11.
Milan plan to improve the financial outlook through “commercial development in the Asian market”.
Yonghong Li signed a capital increase of €60m, but so far has made payments totalling €27m, including €5m paid in early September.
Li has confirmed his commitment, with extra funds to arrive through recapitalisation, which can be increased by a further €60m if the expected revenues from Asia don’t arrive.