Blues owner moves to secure club’s finances
BIRMINGHAM City FC owner Birmingham International Holdings is moving to conclude arrangements which will place the football club on a firmer financial footing.
The board is to hold an extraordinary general meeting where it is expected to agree arrangements which could make the club more attractive to potential buyers.
The proposals include a complicated share transfer agreement with chairman Carson Yeung which will remove the club’s debt to him.
The deal will see BIH issue £15.38m (HK$190.1m) of bonds to Yeung after which he will have no further rights against BCFC. BIH will then assume the £15.3m debt the football club has to Yeung.
BIH also plans to sell around £24m (HK$300m) of additional convertible bonds together with 1.26bn new shares to help it repay the debt.
It is also in the process of concluding a deal with a company called U-Continent Holdings for the purchase of bonds worth HK$50m (£3.94m) which can be converted into a maximum of 1,666,666,666 new ordinary shares in the club.
The proposals are set to be ratified at an extraordinary general meeting in Hong Kong next month.
The club revealed in December that it had made losses of £9m although the sale of players helped to offset this. Nevertheless, it still ended up more than £4m in the red.
The profit and loss account for the full year to June 30, 2013 showed an operating loss of £9.108m (2012: £3.709m). Adding net profit from transfers of £6.094m this reduced to £3.014m. However, when factoring in interest charges this increased the loss to £4.045m, against a profit of £15.7m in 2012.