The company that owns Birmingham City Football Club plans to borrow up to £6.3 million from its new deputy chairman – but with a hefty interest rate.
Hong Kong-listed Birmingham International Holdings said that Yang Yue Zhou, who was named deputy chairman and executive director on the same day, has agreed to lend it the money.
The two-year loan has a 12 per cent interest rate and will be used to repay debts and as general working capital, according to a statement posted on the Hong Kong stock exchange’s website.
The announcement came a day after team owner Carson Yeung was granted permission to travel to Britain in September to visit the team.
Mr Yeung has been charged with money laundering and his bail terms require him to remain in Hong Kong, but a judge granted him permission to make a one-off trip.
The finance boost will provide welcome respite for the club, which has sold a succession of top players since being relegated from the English Premier League last season. Ben Foster, Scott Dann, Roger Johnson and Barry Ferguson are among the playing staff who have departed to help balance the books.
The company said earlier this year it lost £5.1 million in the second half of 2010, and its liabilities exceeded assets by £27.5 million.
Its shares have been suspended since Yeung’s arrest in June. Mr Yeung, a former hairdresser who is said to have made his fortune on penny stocks in neighbouring Macau, owns 26 per cent of Birmingham International’s shares and is its chairman after agreeing an £81 million deal in October 2009.
Despite the unrest, the St Andrew’s club is involved in this season’s Europa League, having qualified by winning the League Cup.
Mr Yeung, who denies the charges of money laundering, will visit the UK to deal with his business affairs from September 15 to 19.
His lawyer Clive Grossman confirmed said it was essential that Yeung visit the UK in his role as owner of Blues.
He is expected to meet Chris Hughton, Blues’ manager on his trip.
Mr Grossman told the court in Hong Kong: “As director and chairman of his company, Yeung holds a duty to his shareholders in England. He has to speak to his board, players, fans and management.”