Just a few days after lifting the Serie A trophy, Inter find themselves thrown into turmoil after it was announced that US investment fund Oaktree have begun proceedings to seize control of the Milan-based football club.
“As of May 22, 2024, funds managed by Oaktree Capital Management, LP (“Oaktree”) own FC Internazionale Milano (“Inter” or the “Club”)” read a press release published by Oaktree on Wednesday morning.
“This follows the failure to repay the three-year loan granted by Oaktree to Inter's holding companies, which expired on 21 May 2024 with a total balance of approximately €395 million ($428.38 million).”
How did Oaktree become the owners of Inter?
In May 2021, with Inter struggling financially, Oaktree provided the club's owners with funds that would allow them to pay players and other employees, as well as covering their financial obligations elsewhere.
That initial loan – according to La Gazzetta dello Sport – was for €275 million but needed to be repaid in full plus interest that would be charged at 12%. The Nerazzurri continued to flourish, reaching the UEFA
Steven Zhang hit out at Oaktree
However, Suning continued to struggle financially, and ultimately found themselves unable to repay the loan when Oaktree’s deadline approached. Indeed, at the weekend, Inter President Steven Zhang insisted he was working to find a solution but admitted in a statement on the club’s official website that the investment fund were rebuffing his efforts.
“During the approach of the pending Oaktree facility redemption date, we have been making every attempt with our partner to find an amicable resolution, including multiple paths for Oaktree to achieve full and immediate financial return,” wrote Zhang.
“Unfortunately, our efforts to date have been exasperated by legal threats, and a lack of meaningful engagement from Oaktree. Not only has this been deeply frustrating and disappointing, such behavior now poses potential risks to the Club that could seriously jeopardize its stability.
“On behalf of Inter, as the President, I want to assure the hundreds of millions of fans around the world that we will do everything possible to protect our colours, fundamental value and stability. We are committed to working towards a peaceful resolution with Oaktree and continue our success story for our beloved Inter.”
In their own statement, Oaktree would go on to say they intend “to work closely with Inter's current management team, partners, the league and the sport's governing bodies to ensure the Club is positioned for success on and off the pitch.”
Alejandro Cano, Managing Director and Co-Head Europe for Oaktree's Global Opportunities strategy added that “Oaktree and the Inter management team will be in contact with the Club's key stakeholders over the coming weeks to ensure an orderly and smooth transition.”
How is this different to the AC Milan situation?
It remains unclear how that might happen, but just like neighbours AC Milan, Inter now find themselves owned by an investment fund. However, it seems there is one key contrast, with Oaktree needing to pay the difference between the valuation of Inter and the outstanding loan debt.
That was not the case when Elliot Management took control of their crosstown rivals, but according to Il Giornale, the contract Zhang and Inter signed with Oaktree guards against that.
Instead, it contains a clause that will see the investment fund needing to pay the difference between Inter’s market value and the money owed by Inter and any other club debts.
With Inter believed to be worth somewhere between €800-900 million ($867.47-975.90 million), that will still require a sizable investment and may see Oaktree looking to quickly sell on their latest asset.