Birmingham City are being charged interest at 11.9 per cent on tens of millions of pounds in loans from its parent company, it has been revealed in new accounts.
Birmingham were able to make a £21m net spend on transfers after relegation last season because League One has different financial rules to the Championship, where, in short, clubs are limited to a £13m football loss per year. In Leagues One and Two, owner investment counts as income, which it doesn’t in the top two divisions.
A strategic report from director Garry Cook in the accounts adds: “The facility… attracts a fixed interest rate of 11.90 per cent. As of June 30 2024, an amount of £48.1m has been provided to Birmingham City from Birmingham City Limited and Knighthead under the loan agreement.
“On October 3, 2024, a deed of amendment was entered into between the company, BCL and Knighthead extending the loan facility to £100m. As of June 30, 2024, the total amount owing from BCL to Knighthead including interest and loan reassignments is £72.2m
