Despite resigning from the board of both Birmingham City Football Club and Birmingham International Holdings Limited, until now Carson Yeung had remained the majority shareholder in the parent company.
However, there were several convertible bonds outstanding on the shares. These were held by Yeung himself, who is yet to cash his is and Yang Yuezhou, who has since converted his bond.
Bonds are offered in return for cash in the interest of pumping capital into the club without diluting the share price or interests of other parties. Although in the long run this is often unavoidable. At some point the bond will be converted to shares making each share less valuable and further reducing the percentage owned by other investors, institutional or individual.
Yuezhou is a property developer from mainland China and has never shown any interest in the football club or the company itself. It is believed that he is involved due to the nature of the vehicle being on the Hong Kong stock exchange. It is big business to even be able to buy and trade shares on that market.
The property developer now becomes to largest shareholder in the holding company with 21.48 per cent. Is this likely to have any effect on the goings on in Birmingham? probably not.
His interest does not include the club, this would have been simply a conversation that had to take place before the bond expired. BIHL have already put in place Pavlakis to run things at the club. Two reasons why they may leave the club well alone.
So what about Yeung? well he is supposed to not be controlling anything within the holding company or the club due to his criminal convictions. We know this may be unlikely to an extent, but I would also say his influence in terms of company direction has dissipated.
The holding company may just be a vehicle of money to these people or precisely the chance to make money. So when it comes down to who’s interest’s are most influential, it may just be each person protecting their own interest – which is the share price. Hence why the clubs sale is so tied up.
Yeung has convertible bonds of his own and is likely to one day become the largest shareholder again.
In terms of the club, nothing is changing, or is going to change. The power struggle going on in Hong Kong is about maximized shares held for the highest price possible. If they could off load the club for a large amount of cash and keep BIHL on the stock exchange the club would have been offloaded years ago.
The simple truth is that the sheer value of the club is what holds their listing on the exchange. BCFC is everything to BIHL, they just won’t treat it as such because they only see money tied up in an asset, whereas you could argue that the club remains the fundamental characteristic of value to the exchange.
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