CIC's cash-raising exercise confirms Huang's interest

EUROPA LEAGUE/Liverpool (2) v FK Rabotnicki (0):THE CHINESE fund represented by Kenny Huang has spent the past fortnight raising precisely the amount of cash required to finance a bid for Liverpool. Sources have confirmed that the China Investment Corporation, the sovereign-wealth fund to the world's most populous nation, is the organisation being fronted by Huang, who yesterday admitted interest in bidding for Liverpool.

In a series of trades since July 19th, CIC has sold $558 million of shares in Morgan Stanley, equating to £351.4 million. That sum is equivalent to Liverpool’s debt to the nearest decimal place, and is exactly the number insiders say has been quoted to interested parties as the club’s sale price.

China Daily, the English-language arm of the Chinese state media, reported yesterday: “China Investment Corp, the Chinese sovereign wealth fund that bought a 9.9 per cent stake in Morgan Stanley in 2007, sold $90.5 million of shares in the investment bank on July 30th, bringing the total amount divested in the last two weeks to about $558 million.”

Although sovereign-wealth funds have enormous values of assets under management, cash is generally tied up in equity and bond markets. This requires liquidation by share sales before major new investments can be made. It is therefore hugely significant that the £351.4 million number is also equivalent to Liverpool’s debt, suggesting that CIC is shifting its assets ahead of an offer for the five-times European Cup winners.

It also indicates that despite the ambitions of the Anfield club’s chairman, Martin Broughton, to generate a return for Tom Hicks and George Gillett, China is refusing to reward them for their three-and-a half-year ownership of the club. The Americans’ capacity to dictate terms is further reduced by the fact that there are few other credible bidders preparing to compete with Huang and CIC.

Huang confirmed for the first time yesterday that he had contacted Liverpool’s brokers in the sale – who together are Broughton and Barclays’s investment-banking division, Barcap – to “register interest”. He did state that he “has made no formal bid”, however CIC’s cash-raising exercise demonstrates it is in a position to make an approach at any time.

In that event the red half of Merseyside will be concerned about the impact of direct investment from the Chinese government.

Manager Roy Hodgson yesterday confirmed his interest in a €7 million move for the Juventus midfielder Christian Poulsen ahead of tonight’s second leg of Uefa’s Europa League. Hodgson also welcomed Fernando Torres’ public commitment to the club following a summer of uncertainty.