FILE PHOTO - The AC Milan logo is pictured on a pennant in a soccer store in downtown Milan, Italy April 29, 2015. REUTERS/Stefano Rellandini/File Photo Picture Supplied by Action Images

MILAN (Reuters) - Italian soccer club AC Milan has picked Bank of America Merrill Lynch to find lenders interested in refinancing the club and debt at its holding held by U.S. hedge fund Elliott, a source close to the matter said on Monday.

Elliott gave Chinese businessman Li Yonghong a 180 million euro (£157.9 million) lifeline last year to complete the purchase of the Serie A club plus 128 million euros to inject into the team, fund the acquisition of players and allow the club to repay its debt with banks.

The loans, with an average interest rate of just below 10 percent, will have to be repaid by October. In case of default, Elliott could take over the club.

Earlier this month AC Milan’s CEO Marco Fassone said he hoped to wrap up a refinancing deal by April.

AC Milan did not immediately respond to a request for comment.