I do get it – no one cares about Hong Kong any more. Knighthead are well and truly in charge in B9 and the former regime is slowly receding into the past.
However, while Knighthead have day to day control of the club, there still remains the final changeover of shares in the club to happen to fully sever the link to the Birmingham Sports Holdings regime.
The announcement made yesterday to the Hong Kong Stock Exchange is the next step on this journey. And while I know many don’t or won’t care, there are enough questions out there for me to put this article together to explain what is happening.
Why should we care what is happening in Hong Kong?
Although Knighthead have total management and financial control over Birmingham City, due to the convoluted way the club is being sold Tom Wagner’s group only actually owns 45.64% of shares.
The remainder of the shares are still owned by what was Birmingham Sports Holdings, who now trade as ZO Future Group (ZFG).
The deal done by Knighthead ensures that as well as total control over the club, Tom Wagner’s firm have a binding commitment to buy the remainder of the shares from ZFG at an undetermined date in the next couple of years.
For ZFG to be able to sell those shares, they need to have diversified their investments enough to no longer be dependent on Birmingham City for the revenues to maintain their listing on the main board of the Hong Kong Stock Exchange.
And while ZFG have no bearing on the way the club is run, until those shares are sold they remain very much the elephant in the room.
This is why this announcement is important.
In the announcement, ZFG confirm to the Hong Kong Stock Exchange that they’ve signed co-operative agreements with another Hong Kong-listed firm to manufacture and sell electric vehicles under the brand name “ZO Motors” in various territories.
The trucks will be built by a company called Weichai New Energy and then sold exclusively outside China by ZFG, via the ZO Motors subsidiary. Both left-hand and right-hand drive versions of these vehicles will be made, ensuring a wide range of markets for ZO Motors to sell their products in.
The agreements run for the next three years (left hand drive) and five years (right hand drive) and hopefully will provide the revenue and impetus to move ZFG on from any connection with Blues.
For those who are really interested, there is a press release online about this deal linked here.
What does this mean for Blues?
In the immediate short term, this deal has no effect on the club whatsoever. As ZFG are no longer financially responsible for the club, any deal they make to bring in extra money won’t affect the club as they’re not putting any money in.
However, for the longer term this deal is nothing but good news.
I don’t think I have to tell anyone that the sooner Knighthead completes the purchase of shares in the club, the sooner we can forget thinking about anything in Hong Kong.
However, there is another outstanding issue which I’m almost scared to mention for fear of kicking a sleeping dog.
Last year it was confirmed that the EFL were investigating connections between the Wang Yaohui (aka the elusive Mr King) and the ownership of the club to see if there were any breaches of reporting with regards to the Owners and Directors Test (OADT).
Since Knighthead took over, that investigation has gone very quiet but there has been no confirmation that it has been concluded or closed.
While I have no firm knowledge, it’s my belief that in light of Knighthead taking control of the club, the EFL have quietly put the investigation onto the backburner in the hope that the problem is now fixing itself.
If this is the case – and I have no reason to believe it isn’t – then it would be best for all parties if any lingering connections between ZFG and Blues are severed, allowing the Wang Yaohui story to die quietly.
As has become evident at Reading FC, as much as it’s enforcing justice to punish errant owners for not obeying the rules and endangering the future of the clubs they own, change of ownership to a better regime is a better outcome for any club than enforcing punishment after punishment.
In short, while this stock exchange announcement doesn’t mean much to Blues fans, it ‘s hopefully one closer to never having to care about them ever again.