Hong Kong court rules receivers will continue to act for Birmingham City FC parent

A HONG Kong court has ruled that receivers acting for the parent company of Birmingham City FC are to continue handling the company’s affairs.

The hearing was in response to a summons served on Ernst & Young by a group of minority shareholders in Birmingham International Holdings.

The shareholders, thought to represent the wishes of former Blues chairman Carson Yeung, had asked the court to limit the role of the receivers and to restrict their term of office until the resumption of trading in BIH shares on the Hong Kong Stock Exchange – or until further notice of the court.

Judges hearing the case have ruled that the receivership order should be continued, but limited in terms of duration, until the resumption of share trading.

Trading in the shares was halted at BIH’s request in December and has yet to resume.

The receivers said in an announcement to the stock exchange that the shares would remain suspended until further notice.

One of the main reasons for upholding the block on trading remains the immediate fate of the BIH business.

BIH has entered into an exclusivity agreement with a company called Trillion Trophy Asia Ltd to acquire the business.

Trillion has been given a two-year exclusivity agreement by the receivers to enable it raise the cash necessary to make the purchase.

Trillion has been pressed to agree the terms after it entered into the exclusivity agreement.

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.

However, if Trillion is unable to raise the necessary funding or it goes over the two-year period then the exclusivity deal will be terminated, the receivers have said.

In their latest update to BIH shareholders, the receivers said negotiations over the deal were continuing.

The receivers added that further announcements on the progress of the deal would be made in due course and at any rate, on a monthly basis until the matter was concluded and a deal was forthcoming.

Trading in BIH shares therefore remain suspended until further notice.