Blues Saga: New deal significantly enhances football club’s finances

THE financial position of Birmingham City FC is set to be “significantly enhanced” following a new loan agreement with the potential bidder for the club.

Receivers acting for the club’s parent, Birmingham International Holdings, have concluded an agreement with Trillion Trophy Asia Ltd.

Trillion has been pressed to agree the terms after it entered into an exclusivity agreement with the receivers to buy the club.

The facility being made available to BIH by Trillion consists of the drawing of a loan for HK$9,813,600  (£820,000) as security for the bank facilities granted by HSBC in the UK to Birmingham City FC.

The agreement will also allow BIH to draw on an aggregate amount of HK$153,000,000 (£12.8m) for the operation of the football club.

BIH has used as security the club’s St Andrew’s ground and the land that surrounds it.

In a statement to the Hong Kong Stock Exchange, the BIH receivers said they had reviewed the group’s financial and liquidity position, and its obligations to the Football League.

“Should the facility be made available by the lender, the liquidity and financial resources of the group would be significantly enhanced,” said the statement.

It continues: “After due consideration of the terms of the facility and other relevant factors in connection with the funding needs of the group for its operation including the club, the receivers are satisfied that the terms of the loan agreement are at arm’s length, on normal commercial terms, and are fair and reasonable and in the interests of the company and its shareholders as a whole.”

The term agreement runs for 18 months but there is the potential to extend this to 36 months should the need arise.

In the meantime, trading in the club’s shares on the HKSE remains suspended.