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Uncertainties surround Birmingham City takeover

Although long suffering Birmingham City fans have been heartened by the prospect of new owners, many uncertainties surround the completion of the deal.

Birmingham Sports Holdings (BSH) has owned 75 per cent of the club since 2016, with a British Virgin Islands-registered company called Oriental Rainbow Investments owning 21.64 per cent.

According to the official paperwork, BSH’s majority owner is a Chinese businessman named Paul Suen, while Oriental Rainbow’s beneficial owner is Vong Pech, a Chinese-Cambodian businessman. Very little is known about either of them, and neither has been seen much at St Andrew’s.

The Athletic, however, understands that the Lopez and Richardson offer breaks down into an up-front payment of £25million to acquire the 21.64 per cent, full operational control of the club and Birmingham City Stadium Limited, the company that owns and operates the stadium.  The remaining payment will then come when BSH hands over its shares.

Their most recent set of accounts, which deal with the 2020-21 season, show Birmingham lost almost £5million. Not bad, you might be thinking, considering that was a season played behind closed doors because of COVID-19 restrictions on crowds gathering and the club’s turnover fell from £22.8m to £13.7m. But then you remember this is the financial year which includes £26.5m in Jude Bellingham-inspired player-trading profits and that the club lost £18m in 2019-20.

They would have lost even more the year before that, but the owners used the then-legal loophole of selling the stadium to themselves, turning a £25m deficit into an £8m loss. This enabled them to avoid breaching the league’s financial fair play rules for a second time. Birmingham had lost £37m in 2017-18.

The Athletic has spoken to several people who have had preliminary discussions about bids for Birmingham. One source, who asked to remain anonymous, said the situation was “hopeless”, with the club losing more than £500,000 a month, £8million needed to repair the stadium, a threadbare squad and not much else to come in terms of transfer instalments.

 


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