Often Partisan

Postcards from HK part II – the Loan Agreement

Birmingham International Holdings yesterday announced to the Hong Kong Stock Exchange that they had come to an agreement to borrow HKD20million from a company called U-Continent to solve their liquidity problems.

I was caught slightly unawares by the announcement yesterday, but being on the ground in the Far East has made it slightly easier to try to get a grasp on what the announcement means to Blues fans and the club. Most of what follows is speculation based on conversations I have had here and thus I urge you to treat it as such. Please also remember that I have no legal or accountancy training and I’m reliant on what I have been told by people who are experts in that field.

I think the first thing to look at is where the money is likely to go. The announcement clearly states that the money is to help liquidity issues and it’s my understanding that it will help the day-to-day operations at BIH. The impression I get is that the company is struggling for cash and with BCFC also skint it means they have to get money from somewhere to keep the holding company operational. I don’t expect any of the money will find its way to the UK, and I also think it may be optimistic to think that this will help solve the issues with relation to the relisting requirements – I think it’s a loan borne out of needing money fast. The rate isn’t massively high but it is above market rate according to people in the know out here which isn’t surprising bearing in mind the situation BIH is in.

I have done some background research on the company (U-Continent) loaning the money and there isn’t a lot to tell; they were formed three years ago and are ultimately owned by a BVI company of a similar name. The company lists one director – Yeung Mau Yuk – of whom I know nothing about and initial enquiries have drawn a blank.

BIH have been in a similar situation before, when it announced an agreement to sell convertible notes to a gentleman called Yang Yuezhou almost exactly two years ago. That debt would have become due now – however from conversations I have had here I’ve been advised that that loan was never taken up. The story is that Mr Yang wanted a shell company to launch into real estate in HK and picked BIH; however as the shares were suspended he couldn’t operate it in the manner he hoped and within a couple of months he bailed, with no money actually being lent. He eventually bought a company called Computech and has proceeded as he wished there.

I think the big thing to take away is that it doesn’t appear that the sale of the club is going to happen any time soon – as I’ve been saying for a while. One credible rumour I have heard is that BIH are looking to relist the company to move into oil exploration in Indonesia – hence the appointment of three oil company type executive directors in May – but whether that is with or without Birmingham City I have no idea. That wouldn’t be in the short-term anyway as rules on oil exploration companies are strict here and the stock exchange would want assurances rules are being followed. However, it could potentially ensure that the stock exchange are satisfied that when/if BCFC is sold that BIH is still a viable business.

In other news, Carson’s stay in hospital appears to have been shortlived as he was spotted by friends of mine in a private members club in Hong Kong last week. Clearly his illness was only short-term and he should be back fighting fit for when he has to be back in court.

Tags: , , ,

65 Responses to “Postcards from HK part II – the Loan Agreement”

  • Carson Yeung says:

    Clearly his illness was only short-term and he should be back fighting fit for when he has to be back in court.

    We shall see Dan.

  • sutton apex says:

    good work al – they will cling onto blues until admin i fear, chasing that premier dream if carson gets off

  • Eddie says:

    How much is HKD20million in real money,
    is it like Turkish lira and worth about £50?

    • almajir says:

      As I said yesterday, Eddie, it’s about £1.7mil.

      • maurice walters from thailand says:

        Al i know it has been talked of before but how much CASH (not property)has Carson had frozen and what happens to it if he is found guilty.

        • almajir says:

          Maurice

          It has been done before.

          From the documents I have, there was about £100,000 in cash frozen. If he is found guilty, it’s get taken from him. That would take a long time though – years. Club can still be sold regardless.

      • John says:

        Apart from BCFC, what other business does BIH have an interest in ? And why do they want to borrow money, if its not going to help Blues ? And who would be stupid enough to lend them money ?

        • almajir says:

          the staff who work there need to be paid.

          rent on the office needs to be paid

          there’s probably other stuff too6

    • Pete says:

      Dan reported yesterday- £1.7m

    • AuldBertie says:

      You’re a bit behind the times Eddie. £50 is about 140TL these days :)

  • Pete says:

    Short lived illness. Is it wrong to be cynical? He has spent the past 2 years in private clubs and living in luxury. Disgrace. I am all for innocent until proven guilty, but how can someone still beable to live this way for so long!

  • Eddie says:

    Funny how some clubs are having trouble with the \Wonga sponsor on their shirt and the principle of short term loans,

    Not us tho

  • DoctorD says:

    There is one big outgoing that will cease next summer — Nikola Zigic’s pay packet. That will wipe 250,000 pounds off a month or 3 million a year.

    • mark says:

      Doctor- if anything learn from that they shouldn’t do it again……imo

      • Bluenosesol says:

        Mark, we should have learnt the lesson after Mike Newell, anothere parasite from a different era. Paid megabucks and couldnt even be arsed to play for us and that was 16 years ago!!……

        • mark says:

          Totally agree with you, but unfortunately they have fallen on their own sword. They do have a right to fix the mess, and we all may not agree on how they have gone about this. The team we have at the moment I cannot fault bcfc…….and if that include them then we also need to congratulate them also imo….

    • tmsblues says:

      Yes that’s right and if you add the other 3 high earners @£15k pw (assuming King’s gone already and saves £1m this season). That’s probably a next year wage saving of nearer £5m . Problem is that’s counterbalanced by a loss of parachute payments of about £4m.!! So its not quite that rosy when Zigic goes !

    • sonabluenose says:

      nah, another loan would cover a years extension

  • mark says:

    Definitely appears to me carson while this break in the trial. Carson is going to continue strengthing his postion. Looks as well the operation went well for carson. If he back in the clubs obviously accumulating to speculate lol…….

  • Brian king says:

    almajir
    BIH the holding company of BCFC need to borrow HKD20 million to keep it operational. I don’t understand what operations do they do, I suspect BIH is just a office with an answer phone so whats is the money for.

    • almajir says:

      Brian

      I’ve been to the office and believe it or not, there are people actually working there.

    • mark says:

      Brian- pp pick it up the other end lol

      • KeepRightcroydON says:

        I don’t expect you to have an answer to this Dan. More a rhetorical question. What are all these people doing working in the BIH office in HK? If the only business of BIH is the club, which has proper employees doing a proper job, surely BIH only needs a skeleton staff to ensure propriety is followed. One good administrator, perhaps with an assistant, to deal with lawyers, accountants etc.

        We know Pannu is on the payroll of the club, so even he should not be a financial burden on BIH.

        All very strange.

        • almajir says:

          Pannu is on the payroll of BIH as well though.

          I don’t know what they do, but there are at least six people in the office from what I saw last time I visited.

          • KeepRightcroydON says:

            Thanks for clarification on Pannu. Explains a lot in relation to the loan. Nice work if you can get it.

  • mike says:

    Why in gods name are people STILL putting money into yeungs and pannus pockets in the form of season tickets etc !! These 2 idiots have ruined our club so as I refused to buy my season ticket 2 years ago ,after 45 years as a ticket holde, I would urge everyone to do the same to FORCE these morns out !! With NO MONEY coming in and the club worthless they will HAVE to sell in the end !!

    • Eddie says:

      I disagree,
      the only person your upsetting by doing that is yourself, as your missing watching your club play football

    • Dazzy Nicks says:

      It also threatens the jobs of the St Andrews staff who are busy running the club on a day-to-day basis.

      • Reesey69 says:

        Sir Harry you’ve hit the nail on the head!
        Keep right on!!! I totally see the starve
        Them out argument, but its our club and
        We will be here much after them!

    • chas says:

      So one of them is flying round the World, First Class and getting hundreds of thousands of Pounds a Year in Wages and the other is , apparently, living the High Life at Clubs and Casinos , and YOU call them Idiots ? What do you do for a living ?

    • Art Watson says:

      I entirely agree with your comments.

      It’s the only way forward.

      To those who object please let me know how we are going to get rid of these morons without starving them of cash?

      • Art Watson says:

        My post was addressed to Mike.

      • almajir says:

        It will not work.

        the last people to suffer will be Carson/BIH/Pannu. they’ll cling on and get rid of everyone else first.

        All we can do is wait them out.

      • Sir Harry 1875 says:

        I renewed because BCFC are my home town club.
        I renewed because i am a Birmingham City fan for life not just the Premiership or Wembley.
        I renewed because the manager is doing his best to get 11 men in Royal Blue shirts to represent my club no matter what abilty they have.
        I renewed because we have a lot of kids in our squad who need support.
        I renewed because some of those kids are Brummies.
        I renewed because i will never turn my back on my club.
        I renewed because thats what a supporter does. Good times and bad.

        If its not the owners its the manager. There will always be an excuse not to go. Until that is, there might be a bit of glory or a good day out to be enjoyed.

        If we somehow pull off a miracle this year and get a trip to Wembley for the play-offs, will you stay at home?
        No i thought not. You’ll be queing for a ticket claiming you’ve been a fan all your life.

        • Art Watson says:

          Sir Harry,

          I’m not a yo! yo!supporter and have followed the Blues for the past 50 years and yes I agree with many of the points you have raised but please explain how we can get rid of these guys.

          It seems to me that its going to be a long time before PP stops playing games with the future of our club.And that’s all it is to him -a game!

    • tmsblues says:

      If they sold 10000 season tickets each year at say £500 each (which they didn’t last year and are unlikely to do so this year) Then, that provides £5m income upfront. That would pay Zigic, King, Loevenkrands and one other I reckon, this coming season. So withdrawal of your support and not purchasing your season ticket will only have a very marginal influence on the future of the Club as its down to a whole lot of other revenue streams that pays for the rest of the squad, management, staff and other running costs. So whilst I respect your views and the need you feel to ‘do something’ I cannot see the value of your protest. So as others have suggested probably the main loser will be you rather than the Club or its Owners!.

    • Guinnessforever says:

      I also thought long & hard about renewing ST and starving CY out of BCFC but with all other cash streams this is highly unlikely. Now with the season starting tomorrow I cant wait. Out of interest how many ST have been purchased this season compared to this time last year?

    • John says:

      Most people who have renewed their season tickets or who will pay on the gate,are probably football fans first and Blues fans second. They go because they love football. Will the people who are refusing to renew their season tickets,go and watch a game at their local park on Saturday afternoons, or maybe Solihull Moors. I doubt it,because they are not committed football fans.

  • Blueboy 88 says:

    If this loan is to smooth the way successfully for BIHL to relist on the HKSE.

    Where will that ultimately lead PP to ?
    Stuggling on regardless , or finally completing the sale of BCFC ?

  • Eddie says:

    it looks like Tom Ross was full of sh*^e in relation to the sale of the club then

    • KeepRightcroydON says:

      My thoughts precisely. I could not have put it more eloquently.

      • Ali Duncan says:

        I struggle with the amount of praise that Tom Ross gets from Blues fans. I personally don’t care for him or his journalistic style or ability so it didn’t surprise me that nothing came out of that.

        • John says:

          Most of the people who say “great commentary Tom” ,are people who’s footbal knowledge is limited and never go to a stadium to watch a live game !

  • Aussieblue says:

    The loan is to BIH Ltd, incorporated in the Cayman Islands. Interest is at 0.5% a month, payable in arrears (about 6% p.a. not bad in today’s market). One of BIH’s directors, Mr Ma Shui Cheong, secured the loan for BIH and is to be paid a 3% ‘Finders Fee’ to his private company Splux Ltd (I kid you not). That’s HK$600,000 (about 50,000 pounds), so a nice little earner for a BIH director.
    I suggest that BCFC will benefit not one iota from this transaction. It’s for BIH – in the Cayman Islands and Carson is Chairman and signed the deed. Go figure.

  • StevieW says:

    BIHL need liquidity why get loans when they can sell us and have the cash without any payback.

    We can then go our way and they can go and do one elsewhere.

    • Gary R says:

      Because CY likes to have a reputation in HK as someone that “owns a Football Club” – it is quite embarrassingly pathetic, but I believe this is at the centre of why he’s hanging on. He believes he’s a big fish, when really he’s not.

      • KeepRightcroydON says:

        That’s right Gary. From what has come out in the trial I have gleaned that he got himself a decent reputation as a barber to the well heeled of HK, he liked to gamble in casinos and in stocks and shares and live the high life. He’s much more a gambler than a businessman. People who gamble for a living, and I don’t mean those who like a flutter, are fools, and as the saying goes: “A fool and his money are easily parted”. He has no money of his own, and he is gambling with our club.

  • Tony says:

    comment edited – comments like that, even in jest are not tolerated.

  • DoctorD says:

    So BIHL are thinking of moving into oil exploration? That’s sure to be a slick operation I’m sure.

  • sonabluenose says:

    so when are you actually going to interview peter pannu?

  • ken says:

    Looks like no TVmoney this side of xmas. Sky has no plans to show us. Abit less to go to Hong Kong

    • almajir says:

      Except the game against Leeds United at Elland Road on October 20…

      • Ali Duncan says:

        And Bolton at home on the 5th October?

        • Gary R says:

          Almajir – is the TV money paid up front anyway, as in it’s a fixed sum regardless of how many times you’re on? Or is it like other people have suggested and it’s a kind of ‘Pay As You Go’…as in, you’re paid when you’re confirmed to be on TV?

  • DoctorD says:

    I see that “Papa John’s is adding to the excitement of the opening fixture by offering you a free pizza if Blues win the first game of the season”-

    Mine’s a MarlonKing size with some CallumReilly hot pepperoni and some Olive Doyle.

  • Bluenosesol says:

    Coventry are about to go into liquidation (That’s liquidation – not admin). They ran out of funds and had to secure ad hoc loans to keep the club afloat. They couldnt delve into the transfer market so adopted a policy of nuturing youth. On Cov Radio today, the fans are phoning in, some are grown men crying and asking is this a 15 point deduction or is it actually the end of Coventry City. The fans blame their greedy board and owners – the company known as SISU. Glad to say there are absolutley no similarities with the Blues!

  • Chris says:

    Such a shame for a once proud football club… This should give the F/A food for thought but they didn’t act them and F all they can do now apart from releasing poxy statement….

    On a brighter note BCFC have got honest law abiding owners who care for the club and sorporters…

  • Chris says:

    supporters

  • George says:

    The holding company loan is a significant move, its for working capital. They need is to get things ship shape and tidy. Security for the loan had to be a condition (new investor/speculator) or for loss limitation for funds previously loaned (old investor/speculator).

    The takeover is close. Peter Pannu is looking for the best possible financial result for himself and CY and they are haggling over the final value. Nobody walks away from a £80m investment without a big fight. The first few results of the new season will probably help fix the price.

    PP is in HK because that’s where the new owners are based, or China. It was probably always the case. Highly likely it’s one of CY’s existing contacts. Pollyanna Chu or Vico Hui? Now there is two people to interview for a forthcoming book…….

    • almajir says:

      A few things.

      1) I have no reason at all to believe a takeover is close.
      2) Rumour is Peter Pannu isn’t in HK either… although I’ve not confirmed that.
      3) Carson doesn’t get on with Vico or Pollyana any more. Indeed, Vico has been looking to sue BIHL for the money he is owed.

      • George says:

        So why raise a £1.7m loan? The annual overheads for six staff and an office in HK is a fraction of that. Nobody lends that much money without security. Its not a small sum. The Blues is not a viable ongoing financial concern. So the money relates to a new course of action.

        Peter Pannu’s present location is more likely to be the UK if he is finalising a deal, he will need current accounts and a cash flow prediction.

        CY’s relationship with Pollyanna and Vico may be strained, it usually goes that way when a financial loss is suffered. However if a dispute needs to be settled it is probably going through expensive lawyers, whilst emotions are running high, so all that has to be funded, hence the loan.

        CY has a window of time, and some thinking time, before his trial restarts. He must have been told by his barrister how it will probably unravel. He will want to sort out his affairs for the sake of his dependants. You can bet his present and ex-wives are giving him grief! Its the last roll of the gambler’s dice if he is hoping a miracle happens and we top the league and are heading back to the Premiership. A Championship club is a very dynamic business if promotion is on the cards but he knows he has to sell whilst there is still some value….

  • KeepRightcroydOn says:

    Wow! What an imagination you have George.


Personalised Gifts for a Bluenose
Haircuts and League Cups
Open Tax Services
Corporate Solutions UK
PJ Planning
Rodal Heating

Archives