As Birmingham City are now in the bottom three of the Championship, the more worried members of the fan base are talking about relegation and the implied financial Armageddon that comes with it. With this in mind I have written this piece to explain what Administration really is – and why it’s unlikely as things stand to happen to Birmingham City.
In recent weeks I’ve written about the problems surrounding the ownership of Birmingham City FC. In this article I wanted to look at issues that are closer to home and affect the day to day running of the club; specifically the club’s poor credit rating and debt issues to local suppliers.
Last week I wrote an article to demonstrate the convoluted nature of the ownership of Birmingham City Football Club, and also to show that what happens on the pitch doesn’t necessarily affect the amount of money the owners make off of it. In this follow-up piece I want to explain to people more about the Hong Kong stock listing and how Birmingham Sports Holdings is valued so highly.
The recent partial sale of Birmingham City to investment vehicle Oriental Rainbow Investments along with the recent share subscription completed by Birmingham Sports Holdings has complicated the question of who actually owns the club a little bit further. As the structure of the ownership of the club becomes more Byzantine, it’s become increasingly difficult for fans to understand.
Birmingham Sports Holdings confirmed in an announcement on Monday to the Hong Kong Stock Exchange the date of an Extraordinary General Meeting to approve the partial sale of BCFC to Oriental Rainbows Ltd. The sale would see Chinese-Cambodian businessman Vong Pech become the largest shareholder in the club.
One of the biggest talking points in English football in recent days is the so-called “Project Big Picture”. First revealed in an exclusive by Sam Wallace in the Telegraph, the plan formulated by EFL Chairman Rick Parry along with Liverpool investor John W Henry, Manchester United vice-chairman Ed Woodward along with others has been controversial to say the least. What effect does it have on Birmingham City?
Following news breaking on Friday regarding a sale of a slice of Birmingham City to Chinese-born Cambodian businessman Vong Pech, there have been many questions online about the purchaser’s identity. Who is Vong Pech, how much money does he have and why does he want to buy this stake in the club?
Birmingham Sports Holdings released their accounts for the year ending June 30, 2020 on Wednesday afternoon. The results confirmed that once again the company had made a loss – although not as great as in previous years. However, coronavirus has clearly had an impact with massively increased borrowing.
On Friday Birmingham City filed details of two charges with Companies House, outlining forward financing of payments relating to the Che Adams transfer to Southampton and the Jude Bellingham transfer to Borussia Dortmund. A total of £18M has been used as security for the charges, which show Macquarie Bank’s London branch as the lender.
Plans to allow limited numbers of fans back into stadiums were put on hold on Tuesday as the Government tightened restrictions to prevent the transmission of coronavirus in England. This has dealt a hammer blow to clubs already suffering financially from the lack of gate revenue and adds more worry to fans concerned with how their clubs will cope.
