The vendor loan granted by Elliott Management to RedBird Capital has been a hot topic among AC Milan fans in recent months. However, as announced by the club this evening, the loan has now been refinanced.
When Gerry Cardinale bought AC Milan from Elliott Management in 2022, he only paid €650m for a deal that was valued at a total of €1.2bn. The remaining €550m was transformed into a so-called vendor loan, granted by Elliott to RedBird, with an interest rate of around 7%.
In recent months, with the repayment deadline set for August 2025, there has been a great debate regarding the vendor loan and whether Cardinale will be able to repay it. As announced by the club this evening, however, it has been refinanced until June 2028.
“AC Milan today informed that a refinancing of the vendor loan held by entities advised by Elliott Advisors UK Limited (“Elliott”) has been completed. The refinancing with Elliott, in its position solely as lender, includes an additional investment of €170 million by AC Milan’s owner, RedBird Capital (“RedBird”), reducing the principal amount of the loan to €489 million, now with a maturity of July 2028.
“Paolo Scaroni, Chairman of AC Milan, commented: ‘Over the course of the past few years, AC Milan’s financial positioning has steadily grown and strengthened under the guidance of RedBird, a committed owner for the long-term. Significant work has been done to ensure the stability of our iconic club, position it for sustainable operational success and uphold the legacy, tradition and values of the Rossoneri’,” the statement read.
This is good news for Cardinale, of course, but it comes as a slight surprise as many expected Elliott to be more firm on the deadline. The additional investment of €170m, as such, played a huge part in getting the loan refinanced and has given the American more time to find long-term investors.
Worst news of the year. We’re now officially doomed in the long term.
Yep
This is what you call buying something you can’t afford to maintain. With interest rate on that loan it makes no sense if Redbird couldn’t buy the club outright without a loan from Elliott.
Lol, credit/financing is how most large development projects work. Very few have the cash. It’s also a hedge against failure. Buy a company for cash and if it tanks you’re in for 100% of the loss. Buy a company for 20% down, 80% finance, and if the company tanks your exposure is limited to the 20%. The company goes bankrupt and you don’t and live to fight another day. Finance 101.
He paid off 1/4th of his loan in one go.
Pretty impressive for a finance guy.
Milan fans are gonna have a meltdown though.
Are you not a Milan fan as well??? Or do you just support Redbird?
Seems like he has just paid the interest that has accrued on the loan.
He owed 550m + interest= circa 700m
He has paid 170m and still owes = 489 +interest
Which will end up being north of 600m in 3 years
So he will eventually have payed around 800m to cover his 550m initial loan
The main thing is we are not in danger, more or less Elliott is still in control, more or less they own part of the club. So we are still in good hands.
The best thing for Redbird is to get another share holder to buy into the club, that way Elliott, Redbird and a very strong partner can continue to build the club, people might argue, but Redbird is vital in the club, they are specialist in building sports brands, which we will need for our growth…
That’s not how it works at all. Elliott is not in control. Elliott will repossess the club only in the event that Cardinale can’t pay back the loan by June 2028. Until then, Cardinale is firmly in control.
Given that Elliott did much better for AC Milan than RedBird, this is TERRIBLE news for us.
It’s the worst news of the year, no doubt about it. The only hope we had for a positive change, was that Cardinale wouldn’t be able to pay back the loan and would leave, allowing RedBird to repossess the club. Now this has been excluded until 2028, by which time, there will not be much left and we’ll probably be battling relegation to Serie B, with the incompetent RedBird management.
He is a good businessman, and sometimes it’s unfair how we speak about him. I look at teams like PSG and Man City, which had mega-billionaire owners and spent a lot of money; it took them about 10 years to become a true force. Even Chelsea spent 1 billion on transfers and, after four coaches, is finally seeing some success.
????
After 4 coaches? Ya so after a year of spend they now have the right coach and are a powerhouse again with a plethora of young talent that are playing well. They will be dominant in a few years. Money well spent.
It’s always those who don’t have $$ are the ones who often criticize the ones that do lol
You are missing my point. They didn’t get it right in one year lol. So we have a right to be upset and to criticize, but there is a chance that the work they are doing this year could be the foundation for success. It is hard to see it now, I agree, but it could be.
Chelsea’s best players are also their most cost-effective investments. Therefore, Chelsea is a prime example of mismanaging $1 billion in transfers.
And then the ones who don’t have $$ and think it grows on trees for those that do 😉
simple math,
u spend 1b u get 10y, then if u spend half of it u’ll get 20y,
Milan 90’s, Barca (Dream Team), Chelsea (Roman’s), PSG & Madrid (Galacticos) b4 they build great squad they hire pro’s & experts in football not some bankers & clowns then most importantly they SPEND! huge spend to build strong foundation
Where is arab money when we need it most?
This is a loan extension of 170 million. Which benefits Elliot primarily.
Yes, Gerry gets extra time but with 170 million added debt to the total package. So an extra 55+ million per year will need to be created by him/Milan to cover this.
That is not good news.
How do you get that from “The refinancing with Elliott, in its position solely as lender, includes an additional investment of €170 million by AC Milan’s owner, RedBird Capital (“RedBird”), reducing the principal amount of the loan to €489 million, now with a maturity of July 2028”? Did you miss the REDUCING THE PRINCIPAL AMOUNT part? The loan is now €489 million plus interest, with the remining balance after periodical payments due in June 2028.
It’s the other way around. The loan has been REDUCED by 170 Million. Cardinale paid back 170 Million, so that the loan was reduced and refinanced to 2028. You don’t seem to be very good in reading comprehension.
Sounds about right. Prolong it to get that stadium built. Then sell and cash out.
The funny thing is: how much will they need to sell for to actually make money? Because if you factor in the cost of the purchase of the team, the cost of building a new stadium, and then all of the interest paid, we could be talking about 3bn just to break even. NO Serie A team is worth 3bn. Not even with a new stadium and some young “stars”. So if that is the plan it just doesn’t make sense.
I don’t think Cardinale will actually build a new stadium. He may start the process, so that he can tell the next buyer of the club “see, we’re working on a new stadium; buy the club now for a bargain because in the future once the stadium is built, the club will be much more profitable.”
Don’t worry. Some Arab sovereign fund will buy it to wash money through Milan, just like PSG and the likes. From the frying pan and into the fire for us.
Sell the Club RN
Oh man. More years of this crap.
He doesn’t have the money to pay the loan imagine if he have the money to build the stadium. And he says that he wants Milan to be with best clubs in Europe. Common.. and show respect for the history of this club and please leave!!!!!
eli is a scout, jeri is street money-less pimp & M is a village girl from soviet territory.
eli found her, bang her & make her looks beautiful.
bring her to New York then sell her to jeri by instalment,
jeri pay it by selling M to everyone cz he think he knew every boss in the city.
so now.. M doesn’t get supply from eli anymore,
eli bang her, jeri bang her & everyone bang her.
every little thing she got from the street is to feed eli & jeri..