AC Milan's Chinese owner seeks new investors - sources

Former Italian Prime Minister Silvio Berlusconi finalised the sale of AC Milan in April to a Chinese-led consortium headed by Li Yonghong in a €740 million deal, the biggest Chinese investment in a European soccer club.

But Li has since effectively become the sole investor after his partners backed out following Beijing's crackdown on foreign acquisitions, especially in soccer, according to a source close to the matter.

The source, who declined to be named because of the sensitivity of the matter, said Li would be more comfortable sharing the financial risk associated with managing and investing in the club, which lost €75 million in 2016 and is expected to remain in the red for this year at least.

A spokeswoman for AC Milan said there was no indication of any potential changes in the club's ownership.

Reuters was unable to reach Li or his representatives in China. Attempts to find a contact for Li in Milan proved unsuccessful.

AC Milan spent €230 million on players during the latest transfer season, behind only Paris Saint-Germain and Manchester City. AC Milan are competing in Europe's second tier cup competition and lie sixth in the domestic league.

A second source said one option being considered to lure potential new investors, including Italian ones, was a Chinese market listing within a couple of years.

The first source said other Chinese investors could emerge if the authorities soften their stance on foreign investment after the Chinese Communist party congress starting on Oct. 18.

The sale of AC Milan to Li took far longer than expected to complete as Beijing clamped down on non-strategic foreign acquisitions, especially vanity deals in the sports industry.

In parallel to the investor search, Li's advisers are also working on the possibility of refinancing the Chinese group's debt with U.S. private equity fund Elliott - which rescued the deal at the 11th hour, a third source said.

Goldman Sachs and Merrill Lynch are in the running for the refinancing, this source said.

Elliott gave Li a €180 million lifeline in March to complete the purchase plus €128 million to inject into the team, finance the acquisition of players and allow the club to repay its debt with banks.

The loans, with an average interest rate of just below 10 percent, will have to be repaid by October 2018.