Often Partisan

BIH to raise £6million

BIH have made an announcement (pdf link) to the HKSE this morning of an intention to place just over £6mil worth (HK$79.5mil) of convertible notes in the company in an effort to raise cash.

What this means in layman terms is that the holding company are looking for investment in the form of a loan, repayable in shares in the holding company in 2 years time. The loan has an annual interest rate of 5%, and when the notes mature the amount of shares in the company will increase by 636mil – or 16.36%. This will obviously dilute the percentages of the company the current shareholders own. It does say in the announcement that it is subject to a further order with regards to the restraint against Carson’s assets.

As a way of raising money, it’s fairly standard; however it does increase the amount of overall debt that the company is carrying. It’s also worth noting that of the HK$299million that the company tried to raise last time, only HK$136mil was raised. There is a placee named as Inkatha Group Ltd, who are based in the British Virgin Islands and have no beneficial owners named – and as such I don’t believe we will hear who these people are.

thanks to Barry for emailing me about this

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15 Responses to “BIH to raise £6million”

  • Bumpyfunk says:

    Don’t understand why 6mill is important considering cash coming in from current mass sales.

    We really need to understand these things and I personally am starting to feel that the effort I have been putting in over the past 30 years is being abused to the hilt. The slowly improving team of the past 5/6 years seems to have been almost fully pillaged, and we haven’t got a single answer, nor a single pound to spend on new players.

    Now this. Surely the life blood, the supporters, are worth more than being treated like this. We are increasingly the laughing stock of English sport, and even more so in Birmingham amongst our rivals. I feel like we are being pelted with tomatoes in the stocks and I have no idea why.

    6 months ago I saw a team that I will never forget at wembley. Since then, what a truly spectacular nose dive. Please board. Give us some information. These snippets via OP are very interesting, thanks, but when will the level of communication from China (or wherever our shareholders are) get to something more than accidental?

  • Jonny says:

    This reminds me of those adverts on tv…

    ‘can’t pay your bills this month? Then why not give quick quid a ring, you’re easy to use pay day money lender’


    *total repayable from a 6 million loan is 97 million


  • Andy says:

    I don’t know if it’s new news or not but on page 8 of the PDF it states that the previous share issue repaid a UK loan to the value of HK$94m. Was this the loan that had the charge over St Andrews?

  • alexjhurley says:

    I think this is good news, although I note that nobody has actually coughed up the money yet…

    Pannu and yeung said that they would raise money in the far east and it looks like despite difficult circumstances, wheels are well in motion to this end. Id also query almajirs statement that this is debt – the investors end up with equity so I don’t think theres cause for concern here.

    So financially we appear to be getting there. And we still own foster, dann, Jerome, zigic and of course fahey !

    Its worth noting that the one thing we do all seem to agree on is the lack of communication and clarity from the board. I’ve read lots of differing opinions on all subjects blues related but not this one. My instinct is to agree, but the smoke and mirrors employed does help in one respect – our ability to keep incoming transfer fees high. Put another way, if pannu came out and said were a portsmouth/leeds, (which by the way we absolutely aren’t – we’ve spent nowhere near what they did on players or wages nor do we have nonsaleable assets on huge wages) then there genuinely would be a fire sale.

    I’ve said it before and ill say it again in summary. We ARE a yoyo club. Establishing ourselves in the prem as equals to villa is a reasonable aspiration and is achievable. But the size of our club makes this very very tough. For a period of time suliivan and yeung have delivered this, and both deserve credit. I’m as cynical as the next man about yeung and pannu but let’s give them the benefit – it wasn’t lack of investment from them that got us relegated, and they’ve subsequently appointed a very good manager, kept some of our bigger names, added gradually to the squad and apparently bought an element of financial stability. Bookies have us as 5th fave – could have been am awful lot worse……

  • Bluenose84 says:

    I can’t believe people are still asking about money and where it goes etc!!
    BIH has its own finances and debt and profit!
    BCFC is its own company that has its own turnover and profit!!
    BCFC is nothing to do with BIH in terms of accounts, if they lose money we don’t, if they make money we don’t unless they decide to pump money into the club from BIH….
    BIH is just a company that happens to own (along with other companies) a football club! The only way BCFC can affect BIH is if it makes more money on its own back to increase its value to BIH and therefore BIH’s overall value and share price!!!!!!!
    People understand please (I’m experienced in the stock market) BCFC has its own turnover, own profit and own debt and has no bearing on BIH only its share value!
    Now the Horror Story!!!!!
    If BIH decided to cease trading or just forget about us then only then would BCFC struggle, we would have no investment to make up the deficit from lost revenue i.e. loss of Premiership money e.g. Yeung putting in £20Million of his own money just like Sully and Co did every time we got relegated – hence the myth they actually preferred us being a yoyo club, BCFC get relegated they invest £20M of their own money to make up the loss and we get promoted getting us around £95M in TV revenue and prize money – they would then take their money back plus a profit and still get paid handsomely!!!
    Now this is where I did not like their treatment of the club because they never took a punt after this to put some real cash in, probably why they sold to CY as they didn’t want to lose any more money (bearing in mind the amount of money they had put in to get us to where we are) and they would have made all their money back plus change when they sold, as CY was stating he would put £40M of his own money in the club and have enough money to keep us going and a business plan….
    Now enter CY – he came in saying he would make the club money by tapping into the Chinese market, this is what got ME excited, as along with the sully and co method of cash raising i.e. small sponsors and TV rights ticket sales etc, but also the huge potential of the Chinese economy (if yeung was able to get the sponsors and TV deals and merchandising (just like Man United did with Park Ji Sung we would buy a Chinese player just as a squad player to get the shirts selling out there of which McLeish did not want!!!!) we would of in effect had a second larger income!!
    Average turnover for a Premiership club ignoring the top four is around £80M quid! CY had plans to double that using china as the market!!!! But this has not happened??? Why I don’t know!
    THIS is where he was RIGHT as this would be the way to do it, properly!! and not by being which most bluenoses seem to want a sugar daddy as they all end up wanting the money back and putting the club in debt i.e. RANDY LERNER!!!
    Average turnover of a Championship club – £20M ignoring the parachute payments!!! Now this where the problems arise!! CY would now make up the deficit by putting his hand in his pocket – which he said he was going to do when we went down! But what then happened? He got his assets frozen meaning he could not pay us money!!!!
    So the main outgoing of any football club is player wages! Pannu then has to sell players on high wages to drop deficit and ensure our wage budget is lower than our turnover and we can still cover other bills as we currently do not have a backer (CY MONEY FROZEN)
    Player sales money will go into a pot to act as a backup if the worst case scenario happens, CY goes down and we have no backer – but one thing is for sure this money has not gone to line the pockets of Chinese businessmen which some idiots believe it is still in BCFC bank account waiting to be used and it would be stupid to spend it not knowing where are backers money will be going!!!!
    The idea would be that BCFC would have an income from Sponsors and Revenue etc in UK and also China – if this were to happen BCFC would never have to worry about money ever again and would have a turnover that would rival clubs such as Tottenham Manchester City and even the Milan clubs in Italy!!
    Again why this has not happened I don’t know and is what I would like answered!!!!!!!!
    Granted this would be easier to do have CY not being arrested or more importantly we were still in the more sponsor worthy Premiership but there is only one person you can thank for that people….
    What is the other scenario CY goes down and we have to find another rich backer to pump money into the club as there is currently nobody else on the BCFC board that can do that and only if someone on the BIH board wanted to do it (which they don’t have to) we would be sold to the highest bidder which could put us in the hands of someone even worse with no business plan only to pump money in out of their own pockets Lerner Esq. But they too will want it back!!!
    One thing is for sure, if CY is innocent and he is given an apology and he will still be backing the club as he promised…
    There is still this business plan and £16M worth of player’s sale money in the bank……

    • Bumpyfunk says:

      I just want some information that isnt a ‘Chinese’ whisper…we need a formal statement etc. Just want to be kept informed. If there is all this money in the bank, I want to be told by Pannu. Everybody feels as though players are being sold for revenue, but we are being given the ‘wages’ argument as a filtered through response.
      …or is it just a huge coincedence that all the players coming in are free when we should have money in the bank…? My real feeling is that CH is doing a very good job in cherry picking Bosmans when we should also be at least linked with players to buy with cash. Between that and the introduction of the kids, I see absolutely zero evidence that BCFC have any money.

      Sorry, contrary to your well written financial logic, I cant see it. The Yeung ones have history in smoke and mirrors book keeping. Hence the need for some form of statement. The fans need comfort, at the very least to give them confidence that their gate money wont be just vanishing.

      • almajir says:

        This is a statement to the HKSE, it’s not rumour it’s solid fact.

        • Bumpyfunk says:

          Understood Almajir, but I think this shows we need some sort of formal statement from the board. This is clearly a financial release, and as such, reads mostly as jargon to me. Ben Fosters recent interview mirrors my concerns. Somebody in the upper circle needs to calm the fans, not just about this, but about numerous things.

          Some points need ironing out as umberella worries – directly linked to this statement.

          Mainly, where are the proceeds from done and ongoing sales of players gone/going?
          If we believe what we are told regarding ‘money being in bank’, then why do we need to raise 6million GBP? We also have some fairly decent ideas of more players out for cash.

          As a result, the average bod cant decipher financial statements, and equally cant put the rationale together with us selling players for multiples of millions of pounds against what debt we seem to have found ourselves in.

          There are loans against the club I hear of, but no explanation. Is this where the player sales money is going? Just lots of speculation at the moment and nobody seems to be saying anything.

          I want to support my club, and I personally find that knowing all the facts is a good way of going about it. (As well as turning up every other week at least!!) I think I am just frustrated with the dramatic way that this has all happened.

          Aside from all of this, you guys do a great job. I dont mean to be a pain…just like to know where we stand. Ignorance isnt bliss.

    • Farina says:

      Really good article.

    • Bluenose John says:

      Thank you for your detailed comments. We all need to be aware of what is going on and how the various options may turn out. The bottom line as you hint is that some other club fans who are enjoying our discomfort may find their own comeuppance. KRO

  • kimberley blue says:

    Does anyone else think it is ironic that our glorious leader is up for money laundering charges and we have just announced a shirt sponsorship deal with a “money transfer firm”

  • Bluenosesol says:

    Guys, I am very much in tune with the observation that a lot of articulate Bluenoses aligned to the financial sectors are showering us with a variety of personal perspectives with respect to the current finances and activities, whilst appreciating the input, I too would be much happier to hear something from the horse’s mouth. I dont recall that the judge placed a gagging order on any of the club’s custodians. The prevalent PR or lack of it is simply appalling. If CY is cleared and the moneyflow is restored then hopefully our trepidation will become water under the bridge, but the current stance by the club is cultivating alienation from the fans.
    On a positive note, it would appear that our new shirt sponsors RationalFX are a bona fide business of international repute. They would surely have performed due dilligence prior to engagement and would not have proceeded with the deal if they thought that their reputation was about to be tarnished by associating itself with a convicted money launderer. this comforts me that CY will out and normal business realtions will be restored! KRO.

  • bluenose08 says:

    isnt that what a chinese laundry dose then ! I am sure cy will iron things out as he is not pressed for time at the moment. its not the money transfers we have to worry about its the player transfers !

  • […] Update – more from the Chinese Press Yesterday I published an article about Birmingham International Holdings raising money via a convertible note issue for £6mil. […]

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