General Meeting of Birmingham City Plc and possible restructuring of BIHL

13 Jul 2015

logo100x100General Meeting of Birmingham City PLC and possible restructuring of Birmingham International Holdings Ltd

General Meeting of Birmingham City PLC

The Blues Trust understands that a General Meeting of Birmingham City PLC has been scheduled for Tuesday 11th August 2015 at St Andrew’s. The meeting, called at the request of Birmingham International Holdings Limited (BIHL), will be held to consider and, if thought fit, to pass the following resolution:

That Ryan Tsz Tsung Yeung be removed from office as a director of the Company [Birmingham City PLC] immediately.

You can see the full text of the notice to members regarding the General Meeting here.

The club web-site, under Board Management, currently lists the following as Directors:

  • Panos Pavlakis, Director
  • Ryan Yeung, Director
  • Shui Cheong Ma, Director

Ryan Yeung was appointed a Director in July 2011 at the age of 18 when Michael Wiseman stepped down from the Board.

Blues Trust Comment

It appears that Ernst and Young, Joint and Several Receivers of BIHL, wish to put further distance between themselves and the Carson Yeung regime which previously ran the organisation, by removing his son, Ryan Yeung, from the Birmingham City PLC board. The Blues Trust welcomes this move – we do not think it is in the interests of the club that Carson Yeung or his associates continue to have influence over matters concerning the club.

The move is perhaps to be expected as Ernst and Young are, according to announcements, currently engaged in negotiations which may result in a company called Trillion Trophy Asia Limited (TTA) assuming control of BIHL. TTA were recently granted a two year exclusivity period in which to conclude a deal. TTA has also loaned substantial funds to BIHL, secured against St Andrew’s. The Blues Trust is obviously concerned that St Andrew’s is being used as security against a loan. An optimistic scenario is that the intention is to convert the loan into shares so that TTA can assume control of BIHL, at which stage the loan and use of St Andrew’s as security would fall away. However, we have no information as to how the deal might be structured, nor do we know details of the people behind TTA or their intentions with regard to the club. We await further announcements from Ernst and Young to clarify this.

We note that Carson Yeung and his associates remain powerful figures by virtue of their large shareholdings in BIHL which comprise both shares in issue and outstanding conversion shares – see below. We suspect this is a complicating factor for the deal that Ernst and Young are trying to put in place, and may account for the lengthy exclusivity period granted to TTA.

Ownership background

Club ownership involves three companies:

  1. BIHL is the company which ultimately controls the club. The company is listed on the Hong Kong stock exchange.
  2. Birmingham City PLC is 96.64% owned by BIHL. The remaining 3.36% is owned by around 3,000 small shareholders, mostly supporters who did not relinquish their interests when Grand Top International Holdings Limited (now BIHL) assumed control of the club.
  3. Birmingham City Football Club Plc is a wholly owned subsidiary of Birmingham City PLC.
The two largest BIHL shareholders are Carson Yeung with 27.89% of the issued share capital and Wang Lei with 15.49%. In the BIHL Interim Report 2015 Wang Lei is described as “the younger brother of Ms. Wang Man Li who is a person cohabiting with Mr. Yeung Ka Sing, Carson as a spouse.” The remainder of BIHL shares are held by individuals with holdings less than 5% of the issued share capital.

Both Carson Yeung and Wang Lei also hold bonds which may be converted into shares in the company. The bonds are not redeemable and are required to be mandatorily converted into share capital at the maturity date which is 4th February 2016 for the majority, and 13th April 2016 for the remainder. A substantial number of shares remain to be converted, much greater in number than the shares in issue currently held:

Shares in issue held % of total shares in issue Outstanding conversion shares
Carson Yeung 2,700,000,000 27.89% 3,750,000,000
Wang Lei 1,500,000,000 15.49% 3,999,999,999
Given the complexities of the BIHL shareholding arrangements it is perhaps understandable that the deal Ernst and Young and TTA are negotiating is taking some time. A further issue is that trading in BIHL shares has been suspended since December 2014 – the resumption date is likely to be a further factor being considered in negotiations.
Mark Sutton

Blues Trust

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