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Friday, 6 December 2013
By: RISEN JAYASEELAN, NG BEI SHAN
PETALING JAYA: Billionaire Tan Sri Vincent Tan is eyeing Singapore’s Catalist market for the flotation of Cardiff City FC, according to sources.
Tan is said to have appointed CIMB Investment Bank Bhd as an advisor for the listing and had been wooed to list there by the Singapore Stock Exchange.
Tan owns 36.1% of Cardiff and since mid-2013 has declared that he had intentions to list the Welsh club.
He was reported as saying then: “We are looking at several options to raise money to pay the banks. I have invested so much, so now, I need to raise some money.”
The Catalist market is akin to Malaysia’s ACE Market that enables fast-growing companies to seek a listing under more flexible requirements such as the absence of financial admission criteria.
It is unclear how much Tan plans to raise from the initial public offering.
It is learnt that the tycoon had looked at the possibility of listing the English Premier League club on the local bourse. However, he had later been wooed by bankers and officials from across the causeway to list on the Singapore Stock Exchange.
In 2010, Tan had paid RM29mil (£6mil) alongside business partner Datuk Chan Tien Ghee to acquire the controlling stake in Cardiff, but had also inherited its debts that could have mounted to RM145mil (£30mil) at the time of acquisition.
Bankers conceded that valuing a football club these days was not easy. Earnings are also erratic. For example, Cardiff is now in a better position, considering it was promoted to the Premier League this year.
“However, if the club gets relegated, then this could negatively impact its earnings,” explained one banker.
There are challenges in listing football clubs, as some of them have performed badly.
The BBC reported that Cardiff had recorded losses of £13.6mil (RM71.91mil) as at end-May 2012 and had debt amounting to £83.1mil (RM439.39mil).
“The accounts also show that the debt to Langston, the company represented by ex-(Cardiff) City owner Sam Hammam, is put at £19.2mil (RM101.52mil), with a one-off payment of £5mil (RM26.44mil) due if (Cardiff) City reach the Premier League while the debt is outstanding,” said the English media.
Tan wanted to pare down its debt level and had called on Langston to renegotiate to a “fair level” so that the unsecured loan could be converted to equity.
He had expressed his willingness to turn the £63mil (RM333.11mil) loan he had given to the club into equity if that happened, according to the report.
Berjaya officials declined to comment.
Tan has been active in corporate exercises in recent times. A string of companies related to him like Berjaya Auto Bhd and Caring Pharmacy Group Bhd were floated on Bursa Malaysia recently, while his attempt to list Berjaya Sports Toto Bhd’s business trust in Singapore and 7-Eleven chain operator Seven Convenience Bhd in Malaysia had hit a snag.
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