Birmingham City FC have been dealt another financial blow – after attempts by their Hong Kong parent group to raise more than £9 million through a bond issue collapsed.
The Far East cash transaction expired after three months and automatically lapsed on October 31, said Blues' owner Birmingham International Holdings (BIHL).
The company announced to the Hong Kong Stock Exchange in July that the £9.17 million would be used for "working capital, potential future investments and acquisitions".
But, announcing a "lapse of subscription agreement," BIHL told the Hong Kong Stock Exchange: "The board announced the subscription agreement has not been consummated by October 31, 2014 and that the board has decided not to further extend the long stop fate."
BIHL said the agreement had lapsed automatically on October 31.
The expiry of the bond issue comes just a month after BIHL announced losses after tax for the year to June 30, 2014, of 156 million Hong Kong dollars, around £12.5 million.
BIHL had issued a profit warning to the stock exchange in August, in which the company said: "Shareholders and potential investors are advised to exercise caution when dealing in the shares of the company."
The bond issue had been announced in July and was signed off by former president and shareholder Carson Yeung's brother-in-law, BIHL vice-chairman Ma Shui Cheong.
It confirmed an agreement had been made to issue a bond of 120 million Hong Kong dollars to a company owned 50 per cent by Victor Ma and 50 per cent by BIHL chairman Cheung Shing.
The latest cash blow comes amid continuing lack of progress over any potential takeover and a crash in the share price of the parent group over the last three months.
Meanwhile, mystery over Blues' future deepened last month following the announcement that shadowy Chinese entrepreneur Yang Yuezhou, had taken a majority 27.37 per cent stake in Birmingham City’s parent group, converting 1.5 billion shares in the Hong Kong parent company.