Also on CFG, this is worth noting:
When I read this on Saturday, it was the first mention I'd seen of a new company in the structure - City Football Group (Midco) Limited. I went through its filings with the registrar of companies and what I diuscovered was as follows:
- it was incorporated in May this year;
- in July, it registered two charges, an action showing it had become a party to security agreements relating to the financial arrangements of its sole shareholder, the parent company City Football Group Limited; and
- six directors were appointed on 14 September this year, all of them directors of the parent company, as is John Macbeath, who was already a director upon incorporation.
Stefan says it's now the holding company for MCFC, which would mean there's been some kind of group reorganisation recently beyond simply a new group company being created. And the fact that they've given the company the authority to raise over GBP 817 million of new share capital also suggests that something is going on - especially as we're talking about a level below the group's ultimate holding company.
If anyone wants to dig around some out more, follow the respective links to the publicly available information held at Companies House for
City Football Group Limited and
City Football Group (Midco) Limited.
One point of interest is that the board of Midco comprises the entire board of the parent company bar one. The big-hitters are there - including Khaldoon, Simon Pearce, Marty Edelman, Egon Durban (co-CEO of Silverlake), and Abdulla Khouri (the events expert from Abu Dhabi, who chairs the company operating the Yas F1 circuit and the Emirate's leading music, sports, and entertainment events company). That seems to indicate we're dealing with a company of genuine substance, not just a minor subsidiary. Interestingly, missing is Ruigang Li, the representative of the Chinese shareholder CMC Holdings Limited, though he remains on the board of the parent company.
So, what's going on? With CFG currently engaged as an equal partner in the construction of the largest indoor arena in Europe and a USD 800 investment forthcoming on NYC FC's stadium, the obvious temptation is to ascribe the most likely reason to something relating to infrastructure development. The sum is simply too big to reflect the company wanting to create an opportunity to issue shares in the event of some vague and as-yet-unknown future need.
Another wrinkle is Li alone not being a director but remaining on the board of City Football Group Limited. Does this suggest that the Chinese shareholder is interested in CFG in general as a global business but not especially in whatever Midco will be doing? Or, especially given the dilution of its stake when Silverlake came on board, are we seeing the Chinese investor gradually slip away from the venture?
We simply don't have enough information to make even an educated guess as to what may be happening. It's probably therefore futile to speculate further, but better instead to keep a watching brief on events. For those, like me, who are football business nerds, it promises all to be very interesting and, potentially, extremely exciting.
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