Coventry have revealed they are in talks with an American consortium about a possible takeover.
Coventry are £28m in debt
The Sky Blues have announced they have signed "non-binding heads of agreement" with Manhattan Sports Capital Partners.
The group are in the early stages of due diligence, but the club said "it will not be possible for some time to be sure if the deal will go ahead".
City are hoping any takeover will eliminate their £28m debt and provide transfer funds for boss Iain Dowie.
A club statement said: "We hope the deal goes ahead.
"Meanwhile, we have made it clear to the Manhattan group that any new arrangements for the club must involve substantial investment in improving and strengthening the squad to achieve the club's Premiership ambitions."
Gary Hopkins, who is heading the Manhattan group's bid, told the Coventry Telegraph: "We are on a very critical path to make this happen.
"We are not delving right down into finances just yet but what we will come back with in about four to five weeks is what we believe is a rational, sensible plan for our own investment in the club.
"And if the parties all agree, we will come together and at that stage disclose what the investment will be.
"But clearly it is big solution. Clearly it is not a few million pounds."