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BIHL Receivers Call in Financial Advisors

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A statement to the Hong Kong Stock Exchange from Birmingham International Holdings Limited has revealed that the company’s receivers have appointed Goldin Financial as financial advisors.

The statement reads …

The Receivers would like to announce that Goldin Financial limited (“Goldin Financial”), a corporation licensed by the SFC for Type 6 (advising on corporate finance) regulated activities
under the SFO, has been appointed as its financial adviser, with effect from 17 March 2015, for the purposes of providing financial and strategic advisory services to the Receivers with respect to the preservation of the Company`s value.

Goldin Financial will among others (i) advise on the structure
and terms of invitation for any proposals to facilitate preservation of the Company`s value, and (ii) review any proposals and advise the Receivers on the relative merits of offers received from interested parties. The Receivers expect to formulate and implement plans to improve the financial position of the
Company, taking into account of advice from Goldin Financial. The Receivers will inform the shareholders of the Company and the public on the progress and development of any plans and offers
from time to time by way of further announcement(s) as and when appropriate.


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So what does this mean for the company? well it would seem that the receivers are taking every step necessary to ensure they are properly consulting competent parties in order to strengthen any future actions.

If they decide to sell BCFC without taking financial advice then they may be found to be negligent in their actions. But provided that they have taken competent advice from experts and then followed the advice it would make the actions harder to challenge in court.

This appointment suggests to me that Ernest and Young are preparing to have every decision they make challenged in some form or another by Carson Yeung.

The statement in its simplest form says that the advisors are there to inform the receivers how best to ensure BIHL can maintain its value and then have a view as to how best to improve that value.

Within the remit it would seem that this will include prospective investment offers from new investors and would also include the sale of any assets the company owns.

It would now be down the the financial advisors to take a look at the companies accounts and present the company with the required advice.

I for one will be very interested as to what they will deem the best course of action for the business. The football club is a large asset, and if BIHL are in no condition to improve it’s value then they may be best advised to sell the club when they deem it is at what would be its highest potential value.

As to what will really happen, at the moment, it would possibly be quite the guessing game. But what is clear is that everything is being done by the book, and with regular updates to the stock exchange. This is a significant improvement on what used to be the norm at BIHL.

In English law, any trustee (a person who is in control of an asset for the benefit of another person) is under a duty to consult on investments. A reasonable requirement that ensures that carelessness is at its minimum, I see good hallmarks of that in this move and remain positive about the receivers actions and the future of the holding company. – I concede I do not know the specifics of law in Hong Kong and this is a simple comparison.

Meanwhile, Carson Yeung has served the receivers with a summons to court in a bid to either remove them or limit their powers. As they were appointed by the court in the first place I would feel comfortable in assuming this is just a cost causing exercise that will be unsuccessful.



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