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Southampton owner under pressure to pay back £110m loan used to buy the Premier League club

Southampton owner Dragan Solak has to pay a £110 million loan he took to purchase the club before the end of 2024.

The 59-year-old took over the relegation-threatened club in January 2022 and used a loan to finance the acquisition.

However, Saints are bottom of the Premier League table, four points away from safety.

They face relegation to the Championship despite firing two managers this season.

Relegation to the second tier would reduce the club’s revenue by a third.

Solak now has to find a way to repay the loan he used to buy the club.

A spokesperson for the Serbian businessman insisted that they would not use Southampton’s finances to make the loan repayment.

Solak owns a Luxembourg-registered investment company – Summer Invest Sarl. It is a subsidiary of Solak and a private equity group.

Summer Invest Sarl is a majority shareholder in the United Group. This is the telecommunications and media operation Solak founded in 2007 that loaned £110m to him.

The company’s accounts show there was an extra £50m loan facility for the businessman. It is unclear if he has used this money.

The accounts state (via The Times): “In December 2021, the group provided a loan in the amount of £110 million (€129.4 million) to Mr Solak based on the loan agreement dated December 14, 2021.

“The loan is secured by shares in Summer Parent Sarl which are held by an entity controlled by Mr Solak.

“The terms were negotiated on an arms-length basis and include a three-year term, customary mandatory pre-payment provisions and a loan-to-value financial covenant.

“An additional £50 million amount remains available for drawing under the loan prior to December 15, 2022.”

Solak reportedly did not expect any immediate returns from the purchase of Southampton and is ready to invest more in the club.

He took over Southampton after his company, Sport Klub, lost the Premier League rights in Serbia and the Balkans to the state-owned broadcaster Telekom Srbija.

It was reportedly a political move by Serbia’s president, Aleksandar Vucic. Solak’s media companies have been openly critical of Vucic’s government.

Many Serbian onlookers believe Solak’s purchase of Southampton was a counter-attack to gain some of the €100m Telekom is paying to the Premier League.

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