Xia: Potential Investment?

News has been reported in the local press in Birmingham that embattled AVFC owner Tony Xia is in talks with a bidder about selling a stake in the club. No details have emerged yet about the party but with a reported £9million tax bill due tomorrow, it could be now or never.

Finances

The report of the offer can be read here.

From the people I have spoken to about the offer it appears to be legitimate, but details are thin on the ground. The report says that the bidders are pushing for majority control ahead of a potential takeover down the line.

The very fact that Xia is considering this should give an indication of how desperate things are.

The Daily Mirror reported on Wednesday that AVFC needed to find £9million by the end of this month to pay wages, tax and transfer commitments.

The tax bill alone is due tomorrow, and unless it has been sent via the BACS system on Wednesday it will be late, which will cause another problem for the club with HMRC.

Having already once been threatened by the taxman a further late payment will not be viewed favourably.

With no acceptable bids forthcoming for players that have been made available for transfer, the choice facing Xia right now is stark – and the only rational choice would be to sell up.

Having borrowed money against transfer payments to come in along with various plots of land owned by the club there isn’t much left else to mortgage and the sensible decision would be for Xia to cut his losses and bail.

However, it might not be as simple as that.

Allowing an outside investor into the business not only dilutes any control Xia may have on the situation, but also opens up the books to an outsider for full examination.

Up to this point, Xia has been utterly resistant to allow anyone else in and has got rid of staff such as Keith Wyness for having the temerity to try and do it themselves.

The next few days could be crucial for AVFC.

If Xia does concede defeat and allow someone else in, then there is a possibility that things in the short term can be fixed.

However, even if that happens, things are going to be difficult in the longer term.

With maybe £75million needed to cover losses in the first year, any consortium who comes in will either require deep pockets or a ruthless streak.

On the other hand, if Xia decides for whatever reason that he doesn’t want outside investment, then that will only serve to make people wonder why he’s so resistant to people coming into the club.

And the long term implications of that are much, much worse.