Milan's Financial Position

[AC_Troy]

Yonghong Li has not yet prepared the €32m repayment to Elliott and is in risk of losing control of the club. It is likely that he will accept one of the offers that he has on the table: either that of Commisso or the Ricketts.

However, there are several requirements that he would like to be fulfilled before any agreement is made. [@sole24ore]

[AC_Troy]

Yonghong Li’s difficulty in selling Milan is reportedly related to his insistence on a clause stipulating his shares won’t be diluted in the future.

[nefremo]

Seems like he doesn't want his shares to be diluted and doesn't want to participate in any capital increases in the future, yet wants to own 30% of the company therefore sharing in 30% of the profits (if there are any).

I don't see the dilution of the shares as an issue for Commisso. It's an easy clause to accept, especially if he is planning on taking over the entire club in the future. But allowing Li not to participate in any capital increases may be a problem. Not sure why Commisso would just let Li keep 30% yet not participate in the 30% of the expenses that the club incurs per say. It's basically Commisso owning 100% when it comes to expenses, yet only 70% when sharing profits.

[Nicolas]

Seems like he doesn't want his shares to be diluted and doesn't want to participate in any capital increases in the future, yet wants to own 30% of the company therefore sharing in 30% of the profits (if there are any).

It is completely normal for your shares to be diluted if you don’t take part in increases of capital. I can’t see any way why Commisso would accept that, given that the club might need to raise capital in the future.

[AC_Troy]

Yonghong Li is currently in New York with his advisor White & Case law firm to negotiate with Rocco Commisso. It's difficult that he escapes from a possible deal this time too [Libero's @tobiadestefano]

[nefremo]

It is completely normal for your shares to be diluted if you don’t take part in increases of capital. I can’t see any way why Commisso would accept that, given that the club might need to raise capital in the future.

Well true, but I think the issue here is different. Commisso (or Milan) would have to issue more shares to an outside party (other words more outstanding shares out there) for Li's shares to be diluted. 

But as I mentioned earlier, if Rocco plans to keep Milan and not raise capital through outside shareholders, then Li's shares will not get diluted. In other words, when a capital injection is needed, Commisso needs to cover it. 
So that deal, in principal, is not that difficult to happen if Commisso wants to keep Milan all for himself. If he's going to start raising money through outside sources (or in other words open up the door for other sharehokders to come in) then we're screwed anyway.

Maybe Li wants Pro-Rata participation rights (which he certainly would have I'm sure) which I doubt. But to me, in simple terms, it sounds like no matter what happens, he wants to keep his 30% so that if/when the value of Milan raises he can sell those at that higher value and make some money (or at least break even).

[Nicolas]

Of course I don’t know which plans Commisso might have for Milan, should he acquire the club. But theoretically if he were to issue shares to an outside party to raise significant capital to raise a new stadium or something like that, it would be outright unreasonable for Li to insist not to be diluted, as each of his shares would increase in value. Of course he could do so through loans etc. but I don’t see why he’d let a silent partner keep a non-dilutable 30% of the shares.

[nefremo]

The only reason he would, is if he plans on keeping the club for himself and doesn't anticipate needed any other outside investors. All talk so far has pointed towards that, but we'll see.

[AC_Troy]

Negotiations between Li and Commisso have resumed after a brief stoppage. However, it is unlikely the deal will be closed by tomorrow - the deadline for Li to repay the €32m to Elliott. [@Corriere]

[AC_Troy]

As of this moment, there is still no trace of the €32m being prepared by Li. [@Gazzetta_it]