Representative of the Chinese government, Kenny Huang, spent a fortnight raising exactly the amount of money to finance a big for none other than the English club Liverpool. China Investment Corporation (CIC) is the sovereign wealth fund to the country that houses over 1/6th of the world’s population and the organisation is fronted by Huang, who has admitted his interest in bidding for Liverpool.
Since July 19, CIC has sold £351.4 million of their shares in Morgan Stanley. That sum is equivalent to Liverpool’s debt to the nearest decimal and it is also the precise number that is said to be quoted to the parties showing interest as the sale price. Could it be a coincidence?
The English-language version of the Chinese state media, China Daily, reported:
“China Investment Corp, the Chinese sovereign wealth fund that bought a 9.9% stake in Morgan Stanley in 2007, sold $90.5m of shares in the investment bank on 30 July, bringing the total amount divested in the last two weeks to about $558m.”
The sovereign wealth funds have enormous values of assets under their belts but the cash is usually tied up in equity and bond markets – requiring liquidation by the sales of share to make major new investments. Therefore, CIC seems to be shifting its assets ahead of an offer for the five time… FIVE TIME European Cup winners.
Despite the efforts of The Reds’ chairman, Martin Broughton, China is refusing to reward Tom Hicks and George Gillett for their three and a half year ownership of the club. Their capacity to negotiate is quite limited as there are few other credible bidders preparing to compete with CIC.
The other bidders include the former Syrian footballer with business links in Canada, Yahya Kirdi, but he hasn’t pursued his interest in buying the club. The Rhone Group also re-emerged as a possible candidate for ownership but the firm has come to the table before looking at a minority-stake investment in March but the deal fell apart.
Huang has confirmed that he had contacted Liverpool’s brokers in the sale to ‘register interest’. He also mentioned that he ‘has made no formal bid’, but CIC has demonstrated that it is in a position to make an offer.
CIC’s website states:
“CIC strives to contribute to the prosperity and development of local economies.
CIC usually does not seek an active role in the companies in which it invests nor attempts to influence those companies’ operations. CIC seeks long-term, stable, sustainable and risk-adjusted return.”
Liverpool fans might be worried about the fact that CIC’s dumping of their shares is only as much as their debt and if Roy Hodgson will be given any transfer budget. Well, CIC will be purchasing a debt-free club and would be able to take out smaller loans to finance the transfer budget. Also, CIC seems to be happy with Hodgson being the manager.