Portsmouth debt goes up to �£135m

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Portsmouth's administrators have revealed the relegated Premier League club's debts now stand at �£135m.

 

In February, Pompey became the first Premier League club to enter administration with debts of �£60m-�£70m.

 

And in April it was revealed the FA Cup finalists, who have had four different owners this season, were �£120m in debt.

 

The news comes on the day creditors have approved the drafting of a debt-repayment plan that will enable the club to emerge from administration.

 

The club is offering to pay at least 20 pence in the pound over five years, and Pompey's current owner Balram Chainrai has said that small creditors (those owed less than �£2,500) and charities will be paid in full at a total cost to him of �£200,000.

 

 

MATT SLATER'S BLOG

After months of speculation, weeks of debate and days of frenzied, last-minute number-crunching, the wait is finally over: Portsmouth's creditors will gather at Fratton Park to decide what happens next to the first Premier League club to enter administration

 

The new plan - a Company Voluntary Arrangement (CVA) - will be drawn up by the club's joint administrators from UHY Hacker Young and distributed within 10 business days of Thursday's meeting.

 

Another meeting will then be arranged within 14-28 days to approve the CVA. This will require the backing of 75% of the club's unsecured creditors (based on amounts owed), whereas a straight majority was enough on Thursday.

 

Portsmouth's so-called "football creditors" must be repaid first and in full under football's rules.

 

This group includes clubs still owed over �£17m in transfer fees by Portsmouth, and current and former players who are owed almost �£5m in bonuses, wages and image rights payments.

 

Chainrai will also get his outstanding �£14.2m loan repaid in full but his three predecessors - Sacha Gaydamak, Sulaiman Al-Fahim and Ali Al-Faraj - will have to accept the same reduced rations on offer to the non-football, unsecured creditors.

 

Prominent among this group is Her Majesty's Revenue & Customs (HMRC), which is owed �£17.1m in taxes and National Insurance contributions.

 

Under the new plan, the company Portsmouth City Football Club will be liquidated after nine months and a new one set up.

 

The CVA plus the club's assets will be transferred across, including the 'golden share' that is membership of the Football League.

 

The liquidation of the old company was agreed to by HMRC as it allows a thorough investigation of the whole situation at Portsmouth to take place.

 

It was made clear in Thursday's meeting that the alternative to this plan would mean the creditors would see nothing.

 

The creditors' committee is made up of Ocadia (Gaydamak's company), the Professional Footballers' Association, football agents Capstone, and two local suppliers acting in concert.

 

The first year of the CVA will be funded by releasing or dramatically reducing the wages of all out-of-contract players, and beyond the first year the funding will come from the parachute payments made to clubs relegated from the Premier League to the Championship.

 

The target is to get the annual payroll down to �£10m from the current total of approximately �£20m.

 

http://news.bbc.co.uk/sport1/hi/football/teams/p/portsmouth/8664722.stm