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Chelsea's players gesture at the final whistle during the League Cup semi-final football match between Arsenal and Chelsea at the Emirates Stadium in London on January 24, 2018. / AFP PHOTO / Ben STANSALL / 

AC Milan's superb recent run faces a stiff test against Arsenal in the Europa League last-16 first leg in Italy on Thursday amid a backdrop of murky finances which are threatening one of Italy's most successful clubs.

Former AC Milan midfielder Gennaro Gattuso has turned around the fortunes of the struggling former European power on the pitch, with his side unbeaten in 13 games, and back within reach of Champions League qualification.

But behind the scenes European football's governing body UEFA have voiced concerns over the club's complicated financial situation under their new Chinese owners.

There have been questions about the financial stability of the Chinese-led consortium that purchased the club from Silvio Berlusconi for 740 million euros ($918mn) last April, spending more than 200 million euros on new players in the summer.

The seven-time European champions have a massive loan for repayment and are in trouble with Financial Fair Play restrictions, with Bank of America Merrill Lynch (BAML) given the mandate to refinance debts.

AC Milan are working to refinance more than 300 million euros in high-interest loans from US hedge fund Elliott Management. If the club is not able to refinance by next October the US hedge fund will seize control of the club.

But limited information on the source of Chinese owner Li Yonghong's wealth is proving a barrier to refinancing with the 48-year-old businessman last month dismissing reports he was insolvent when he purchased the club.

The club are also in the firing line with UEFA.

European football's governing body in December rejected AC Milan's offer of a voluntary agreement to restructure finances, stating "there are still uncertainties in relation to the refinancing of the loans to be paid back in October 2018 and the financial guarantees provided by the main shareholder".

UEFA will assess Milan's finances again in the coming months with possible punishments including limits on transfer spending, player salaries, and squad sizes for UEFA competitions.

- Europa League boost -
In the meantime a board meeting will be called to approve a capital increase to get the club through to the end of the season making the revenue generated by their Europa League run of increased importance.

"I'm very optimistic about any potential refinancing of the club's debt," said Marco Fassone, AC Milan's managing director as the club announced losses for the first half of the season to December 31, 2017 were down to 22.3 million euros from 39.4 million for the same period in 2016.

Gattuso's side can help lighten the financial burden by defeating Arsenal and keeping their Europa League campaign alive as long as possible, to move closer to a Champions League place for next season.

A packed San Siro Stadium should certainly help with more than 70,000 fans expected in the stands, before the second leg in London on March 15.

AC Milan beat AS Roma 2-0 away in their last Serie A game, as they sit joint sixth, and reached the Italian Cup final in midweek after overcoming Lazio in a dramatic penalty shoot-out.

But their derby showdown with Inter Milan on Sunday was postponed due to the death of Fiorentina captain Davide Astori, so the team will be rested for Arsenal as they will look to extend their winning run to seven games.

Arsenal, meanwhile, are in crisis, having lost eight of their last 13 games in all competitions, to sit sixth in the Premier League, with the Europa League representing their only remaining chance of success this season.






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