Forbes and legal analyst reveal the curious story of the role Blue Skye played in Milan’s takeover

By Oliver Fisher -

A lot of AC Milan fans may be unfamiliar with Blue Skye, a company who played a big part in Elliott Management’s acquisition of the club.

Alas, Chloe Beresford and lawyer Felice Raimondo have combined to produce a fantastic article for Forbes which discusses the entire situation at length, including background on Blue Skye.

Neapolitan financiers Salvatore Cerchione and Gianluca D’Avanzo were the founders of the firm, who own a portfolio of luxury properties around the world and like to keep their affairs as away from the public eye as possible.

Both founders appear to be long-time associates of former Milan CEO Adriano Galliani as they were all on the board at Milab-based private equity firm SOPAF.

Raimondo – a legal analyst and writer – has revealed how Blue Skye were crucial in helping Elliott Management take control of Milan.

“The help of Blue Skye, a company specialised in debt restructuring among other things, was undoubtedly essential for the purchase of AC Milan” Raimondo said.

“Thanks to the intervention of Blue Skye, a company already present in Luxembourg, Elliott was able to speed up the operations relating to the bridging loan made towards Rossoneri Sport Investment Lux, another Luxembourg company at the time owned by Mr. Li who purchased the 99.93% of Milan.

“In fact, on March 20, 2017, Blue Skye took control of a Luxembourg company, namely the Luxembourg Investment Company 166, which on April 4, 2017 changed its name to Project Redblack, i.e. the vehicle that physically lent the decisive money for the closing to Rossoneri Sport Investment Lux.

“Subsequently, Blue Skye on April 10, 2017 ceded control of this case – Project RedBlack – to two vehicles owned by Elliott based in Delaware (King George and Genio).

“So in just 20 days Blue Skye prepared the ground for Elliott to physically operate in Luxembourg through Project RedBlack, and then facilitate the necessary loan for the closing by the Chinese led Rossoneri Sport Investment Lux.

“On 13 April 2017, Elliott put in a clause on this company, which was exploited at the time of execution when Mr. Li became insolvent by breaking one of the established covenants.”

On why Elliott needed Blue Skye, Raimondo reveals how the quick answer is – ironically – speed: “Luxembourg is undoubtedly a privileged destination for mergers and acquisitions as it has significant tax, bureaucratic and even judicial facilities.

“Just think that in July 2018 Elliott released the pledge to Rossoneri Sport Investment Lux in just a few days, taking control of the vessel that currently holds 99.93% of Milan with extreme speed. This is nothing comparable to similar procedures under Italian law, which takes much longer.

“Blue Skye collaborated with Elliott for the purchase of the famous Hotel Bauer in Venice. In 2016, Blue Skye restructured the debt of the hotel, then in 2017 signed the preliminary purchase agreement with the American fund and in 2019 they completed the operation together.

Forbes notes how a deal was brokered for the Bauer Hotel which benefitted the party who was essentially passing the property over, and that similar accusations could be made that Blue Skye organised a deal for Elliott to benefit themselves.

“Salvatore Cerchione and Gianluca D’Avanzo are members of the AC Milan board of directors and on 10 October 2018 D’Avanzo also assumed the position of Chief Financial Officer,” Raimondo added.

“Elliott themselves shy away from publicity. These companies have their own school of thinking in business, without making proclamations. This is a novelty for Italy where instead we have always been used to owners who had more direct contact with the public.

“In this sense, I believe that the current ownership should intensify the relationship with the fans, because Italian sport and football in particular is very passionate. Getting more involved with the club’s environment more is a choice that would pay off in terms of esteem and credibility. On the contrary, managing the company while remaining perched in their ivory tower would only bring distrust.”

Tags AC Milan