U.S. hedge fund Elliott assumes ownership of AC Milan after Li defaults

Activist hedge fund Elliott Management officially took control of AC Milan on Tuesday after announcing that Li Yonghong, the mysterious Chinese businessman who acted as owner of the club for the past year, defaulted on a loan payment.

Elliott said in a statement that it will inject €50 million to "stabilise the club's finances" and provide "further capital over time to continue to fund AC Milan's transformation."

The change of ownership comes at a delicate time for the Rossoneri, who were recently booted from European competition for one season over financial uncertainties. Milan has appealed the decision to the Court of Arbitration for Sport.

Elliott handed Li a high-interest €308-million loan to complete the acquisition of the club in April 2017 for a total of €740 million. Li had until October to repay the loan at just below 10 percent, according to Reuters.

Li, who was reportedly declared bankrupt by a Chinese bank in February, needed a further €32-million injection in June. He dawdled as offers came in to buy a majority stake in Milan, and eventually failed to meet the deadline to repay the sum.

U.S. media magnate Rocco Commisso and the family of Chicago Cubs owner Tom Ricketts have declared their interest in becoming shareholders, but Elliott's co-founder, Paul Singer, doesn't seem too eager to sell the team.

"Financial support, stability, and proper oversight are necessary prerequisites for on-field success and a world-class fan experience," Singer said. "Elliott looks forward to the challenge of realising the club's potential and returning the club to the pantheon of top European football clubs where it rightly belongs. Elliott also strongly believes in the value-creation opportunity at AC Milan."