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Hedge-fund titan David Einhorn has restructured his $200 million investment in the struggling Mets franchise — categorizing only half the cash infusion as an equity investment and the other half as a loan — erasing opposition from the team’s bank lenders and paving the way for the deal to close by the end of the month, The Post has learned.
Half of Einhorn’s cash will go to repay a loan from Major League Baseball and to pay down bank debt, sources familiar with the situation said. The other half will go directly into team operations.
The bank lending syndicate of the money-losing team, led by JPMorgan Chase, balked at the original terms because it put Einhorn on the repayment line in front of them. Their loans are due in June 2014.
The reworked deal, sources noted, allows Einhorn to be repaid in five years, after the banks. But it also has no net change in the debt levels of the team.
As originally constructed, Einhorn’s $200 million cash infusion — for about 33 percent of the cash-starved team — was reportedly an investment that co-owners Fred Wilpon and Saul Katz could pay back in three years. Upon repayment, Einhorn would have retained a roughly 17 percent stake in the team.
The new deal will buy Einhorn only a 17 percent stake in the team, sources said. He will also become a limited partner, one source said. If he is repaid in full, he will retain that 17 percent stake — in exchange for the cost of using the money for five years.
While the newly structured deal gives Wilpon and Katz more breathing room to repay Einhorn and a greater chance of attracting more cash by selling another minority stake in the team down the road, it also includes a sweetener for Einhorn, sources said.
The hedge-fund executive still retains the right to buy, for a token amount, a majority stake in the team if Wilpon and Katz fail to repay the investment.
The Mets will use the $100 million loan from Einhorn to repay the $30 million emergency loan they took from MLB in 2010, and $70 million to reduce the money they owe their lending group, lowering the debt from $500 million to $430 million.
Sterling Equities, the Wilpon and Katz company that owns 100 percent of the team, will then have $100 million left to fund operating losses, expected to be $60 million this year, the source said.
It is possible the banks will ask Sterling for more cash in a few years to refinance their loan, and that the Wilpons at that time will need to bring in another equity investor, the source said.
The banks are fine with a condition giving Einhorn the right to take control if Sterling becomes insolvent, since they want a well-heeled investor running the team and their loans would still be addressed before Einhorn’s, the source said.
“All interests are now aligned,” the source added.
The Mets declined comment, and Einhorn did not return calls. jkosman@nypost.com