Becoming Rich with Daily Scavenging APP-Chapter 594: The Pitfall Behind the Scenes

Although both are Huaxia companies, Chen Yiyang has no connection with Suning.

He originally wanted to directly contact the boss of Suning Group.

But after some thought, he felt it was inappropriate.

According to Alemas, this is an opportunity that any sensible person would see as a bargain.

But despite the time passed, nobody has taken advantage of it.

This can only mean that there are some troubles within that others find difficult to resolve.

Chen Yiyang felt that returning to his country to find someone might not help him understand the mysteries, so he had to find someone locally in Italy to inquire.

As they say, your enemies will always know you better than you know yourself.

Suning has no enemies in Italy, but Inter Milan, as a football club, has plenty of rivals.

Even in Europe, where football clubs have many fans abroad, they are regional within their own countries.

Basically, every club has a region supporting it.

These regions not only provide the club with fans and attendance rates, but the local newspapers also provide a public opinion offensive for the local clubs.

So, to find dirt on Inter Milan, Chen Yiyang just needed to look for the media in the regions where Inter Milan’s rivals are located.

Italy is known as the Huaxia of Europe.

This is not false, because Italy and Huaxia are very similar in many social atmospheres, both emphasizing relationships and sensibility.

So after buying some small gifts, Chen Yiyang quickly found himself sitting at a table chatting with the chief editor of a media outlet.

"About Inter Milan," the chief editor of the newspaper, considering the small gift from Chen Yiyang, said earnestly, "we have indeed investigated this matter.

For the sake of friendship, I do not recommend you purchase Inter Milan. This deal is definitely a trap, unless you are willing to spend over a billion euros to acquire a club like Inter Milan."

"Over a billion euros?" Chen Yiyang asked, somewhat puzzled. "Didn’t Suning only owe a few billion euros in debt?"

"Suning indeed only owes North America’s Oak Capital a few billion euros in debt, but Inter Milan is another story entirely."

The chief editor of the newspaper sneered, "In fact, Inter Milan itself still owes a lot of money, and there is a debt of four hundred million euros that is about to mature and must be repaid."

Based on the chief editor’s explanation, Chen Yiyang finally understood the intricacies involved.

Inter Milan is indeed worth a billion euros, but they also have a significant amount of debt themselves.

Large football clubs are actually quite hard to profit from. Due to the competitive pressure among football clubs, substantial investments are required in buying players to maintain competitiveness.

But football players in real life are not like in games, where they have a definite skill rating that remains constant no matter what.

The competitive state of real-life football players is influenced by many factors.

Sometimes a player performs excellently at another club, but after you buy him, he performs poorly and can’t even play.

In such cases, investments of millions or even tens of millions go to waste directly.

Therefore, the football club industry is one where you can’t get results without investments, but even with investments, there are no guarantees for results.

Under such circumstances, profitability is wishful thinking. If Inter Milan can sustain itself, it’s already good; when Suning took over Inter Milan, there was already a significant amount of debt.

"After taking over Inter Milan, Suning has been borrowing in the club’s name to develop Inter Milan without investing its own funds."

The chief editor continued, "Thus, during Suning’s management of Inter Milan, the club incurred a lot of debt. Many of these loans come with high-interest rates."

"So how much does Inter Milan owe now?" Chen Yiyang asked.

"About eight hundred million."

"Hiss." Chen Yiyang drew in a sharp breath.

Looks like after purchasing Inter Milan, he would also have to help Inter Milan repay its debts.

The market value of Inter Milan is only a billion, and even selling for that isn’t guaranteed; now they have to pay off an eight-hundred-million debt.

"Moreover, this is just the debt on paper, with interest rates ranging as high as thirty percent on some loans. The exact amount depends on the interest specified in the contracts."

"So if Inter Milan were really for sale, at what price could it be sold?" Chen Yiyang asked.

"It feels like eight hundred million at most, but of course, the situation is very complex."

The chief editor continued, "Italy has a fair trade act aimed at football clubs that prohibits borrowing while signing new players.

This means, if you buy Inter Milan and want to immediately flip it while it’s still performing well, it’s impossible.

Because if there’s no further investment to maintain its competitiveness, Inter Milan’s performance might drop due to lack of investment and thus become worthless."

"It really is troublesome." Chen Yiyang stroked his chin.

He did not expect Suning to have chosen to borrow under Inter Milan’s name to maintain its development at first.

This resulted in the debt being entirely on Inter Milan.

"So where did the money Suning borrowed from North America’s Oak Capital go?" Chen Yiyang continued to ask.

"That we don’t know," the chief editor replied, "but it certainly wasn’t spent on the Inter Milan club.

Suning initially spent over two hundred million to buy seventy percent of Inter Milan’s shares and then gradually acquired the rest, eventually fully acquiring Inter Milan.

But in the end, it only cost about three hundred million euros altogether.

After which Suning pledged these shares of Inter Milan to borrow 2.7 billion euros from Oak Capital.

"You mean Suning barely spent any money purchasing Inter Milan?" Chen Yiyang inquired.

"Not just that," said the chief editor, "according to the information I’ve received,

the contract between Suning and Oak Capital should be like this. The annual interest rate for these 2.7 billion euros is twelve percent.

If Suning cannot repay this money within three years, all these shares of Inter Milan will belong to Oak Capital.

Additionally, Oak Capital will give Suning’s boss an extra one billion euros as compensation." 𝓯𝙧𝙚𝒆𝙬𝙚𝒃𝙣𝙤𝒗𝓮𝓵.𝙘𝙤𝙢

"Wait a minute?!" Chen Yiyang quickly caught on.

"Who will receive this compensation?"

"I didn’t find the specific contract, but according to past practices, Oak Capital might directly compensate the boss of the borrower."

Chen Yiyang slowly started making sense of things.

Using money from domestic businesses to buy a club abroad, then borrowing in the club’s name to develop the club.

Once the club gains some value, pledging its shares to borrow from foreign capital.

The borrowed money’s destination remains unknown.

And if the borrowed money isn’t repaid, Oak Capital would still have to hand over an extra one billion euros to Suning’s boss.

This, indeed, is the real bargain.

Moreover, Suning has considerable debt domestically, but even if they went bankrupt, domestic creditors would have no way to chase these funds abroad.

Upon hearing the chief editor’s commentary,

Alemas also remarked in surprise, "I only knew Inter Milan was looking for investors everywhere, but I had no idea there were so many intricacies involved."