More misery for Blues as £9m fundraising lapses

LATEST efforts by the owners of Birmingham City FC to attract investment into the club have failed following the collapse of a bond issue.

The board of Birmingham International Holdings launched the bond issue in July with the intention of raising around £9.6m (HK$ 120,000,000). The money would have been used to provide working capital for the club.

BIH said in a statement at the time: “In light of recent market conditions, the directors consider raising funds by issuing Convertible Bonds is justifiable. It represents an opportunity for the company to enhance its working capital and strengthen its capital base and financial position for possible future investments and acquisitions including but not limited to the potential acquisition, as and when opportunities arise.

“The directors consider that the issue of the Convertible Bonds is an appropriate means of raising additional capital for the company since it will not have an immediate dilution effect on the shareholding of the existing shareholders.”

However, in a new update to the Hong Kong Stock Exchange, BIH said the fundraising – or subscription – had not been completed in the three-month timeframe and the board had therefore decided not to extend the offer.

Quite where this leaves the club’s finances is unclear.

The struggling Championship side has been starved of funds for some time and there has been little investment in players, resulting in a second successive flirtation with relegation.

Fans will be hopeful of some improvement following the arrival of new manager Gary Rowett but will not be content until a new regime is in place following the scandal surrounding former owner Carson Yeung – currently serving six years in jail after being convicted in Hong Kong of money laundering charges.

BIH was forced to issue a profit warning in August after announcing losses in excess of £12m. The holding company said the losses were attributable to a decrease in revenue from the Championship club and a reduction in transfer fees.

The club remains up for sale but potential suitors appear thin on the ground.