Inter president’s Chinese debt casts shadow over refinancing


Italian newspaper La Repubblica outline how Inter president Steven Zhang still has an outstanding €320 million debt to a Chinese bank which could be impacting his ability to obtain refinancing. Zhang had until the end of today to repay a €395m loan from Oaktree, and failure to do so could result in the club being taken over by the investment fund.

La Repubblica write:

“As Inter Milan celebrate their recent successes, including their 20th Serie A title, financial troubles loom over the club’s ownership. The issues stem from a significant debt owed by Steven Zhang to a state-controlled Chinese bank. This debt has raised questions among international investors about Zhang’s ability to meet his financial obligations.

In February, a major investment fund in London reviewed a financing request from Zhang’s advisors. Concerns were heightened by the fact that China Construction Bank, which Zhang owes €320 million, is predominantly state-owned. According to MarketScreener, 59.31% of the bank’s capital is controlled by China Investment Corporation (CIC), a sovereign wealth fund managing China’s foreign exchange reserves, with assets totaling $1.35 trillion as of the end of 2023.

This context explains the reluctance of institutional investors to extend new credit to Zhang, who also faces a repayment deadline to Oaktree Capital Management. Zhang must repay €275 million, plus substantial interest, by today. This loan was secured through a Luxembourg-based entity that controls Inter Milan. Zhang has not left China since June last year, missing the celebration of Inter’s 20th championship title, which brought a second star to their jersey and established him as the third most successful president in Inter’s history.

A ruling by the Hong Kong Supreme Court on September 16, 2022, requires Zhang to repay the €320 million to the state-controlled bank. This ruling has been enforceable in Italy since March, following a decision by the Court of Appeal of Milan, allowing the creditor to pursue Zhang’s assets in Italy.

If Zhang fails to repay Oaktree by today, the fund can seize 99.6% of Inter’s shares, including the 31% held by Lionrock. This transfer of control could be finalized within days, under the jurisdiction of Luxembourg courts. According to the pledge agreement, Oaktree must compensate Zhang by paying him the difference between the club’s value—determined by an Oaktree appraiser—and the debt. To avoid legal disputes, the fund might opt for a more favorable settlement for Zhang. Nonetheless, Zhang is unlikely to take actions that could harm Inter.

Beppe Marotta, Inter’s CEO of Sports, indirectly confirmed this stability after Inter’s 1-1 draw with Lazio and the presentation of the championship trophy. “Zhang gives us security, despite what our detractors say. We are a virtuous club, and I challenge anyone to scrutinize our accounts. The Zhang family has shown their love for Inter. Any decision they make will be out of love for the club and its fans.”

Zhang, still striving to retain control of the club, shared a photo on Instagram of a banner displayed at San Siro that read, “Thank you, Steven.” Over the past eight years, the Zhang family has invested more than €700 million in Inter Milan. As the club looks to the future, the outcome of Zhang’s financial maneuvers will be pivotal in determining the next chapter in Inter’s storied history.”


Serie A obsessive.