Cardiff agree share deal to ease debt burden
Cardiff shareholders have agreed a deal to in effect wipe out £9m of the club's debt as the Bluebirds' Malaysian owners plan for the 2011-12 Championship season and beyond, reports Wales Online. The Malaysians have converted £5m of advanced funding into shares, giving them a combined holding of 49 per cent.
Others who gave substantial loans to the club have also converted some of those sums into shares to ease the debt burden and aid the day-to-day running of the club.
"The directors will then have the authority to allot the balance or new ordinary shares in response to investment and other opportunities," said Bluebirds' chairman Dato Chan Tien Ghee, known as TG.
A letter to shareholders said the moves improve the club's creditor position in the short term and for the future.
The letter read: "This will make the servicing of the debts more manageable, while also significantly improving the balance sheet."
The major Cardiff City debt which remains unresolved is to Langston, who issued £24m in loan notes to the club when Sam Hammam was the Bluebirds' owner.
"Of the principal historical creditors, this leaves only Langston Corporation to deal with," said Dato Chan.
After the move was given the green light, TG pledged Malaysian commitment to the club was full on, declaring: "Cardiff City has been around for 100 years. There is going to be another 100 years. We will fight for this club.
"This is not a normal business and when we came to Cardiff City we got into something we are not used to.
"But we don't see this as a business. It is an institution. One we should be proud of.
"We are custodians and will do our best for this football club.
"We want Cardiff City to be in the Premier League, but we should also look at a firm foundation, firm building blocks for this club so our future generations can have this institution way beyond our time.
"We also have to be competitive. Over the last two seasons we have been in the top five of the Championship.
"Nobody is perfect, but we will do our best.
"The name of Malaysia is on City shirts and that underlines our confidence in this.
"We are spreading the Cardiff brand. Expansion to the Far East is important. We turned down other offers of sponsorship. We believed Malaysia should be on the shirts because we are very committed.
"We have been through and are going through a lot of pain. We are also doing our best to see if we can get to the Premier League because it makes sense to try and get there.
"If this is a business you may wonder at times whether we are in the loony house. But it is not a business, Cardiff City is an institution."