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Page last updated at 15:56 GMT, Thursday, 6 May 2010 16:56 UK

Portsmouth debt goes up to 135m

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Positive day for Pompey - Administrator

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 small creditors (those owed less than £2,500) and charities will be paid in full at a total cost to him of almost £200,000.

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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).

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), whose claim on Pompey has risen from £17.1m to an eye-watering £35m in fines, taxes and National Insurance contributions.

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

The CVA and club's assets, including the "golden share" that enables Portsmouth to play in the Football League, will then be transferred across to the new entity.

The liquidation of the old company was agreed to by HMRC as it allows a thorough investigation of the recent 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 (a Gaydamak investment vehicle), the Professional Footballers' Association, football agents Capstone and two local suppliers acting in concert.

The first year of the CVA will be funded by transfers and dramatically reducing the wage-bill. Beyond the first year the funding will come from the club's usual revenues and parachute payments made to clubs relegated from the Premier League to the Championship.

The target is to get the squad's annual payroll down to £10m from the current total of £40m.



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see also
Pompey 'misled' squad over wages
06 May 10 |  Portsmouth
Peter Storrie on Portsmouth sales
05 May 10 |  Front Page
Portsmouth Europa appeal rejected
22 Apr 10 |  Portsmouth
Portsmouth debts close to 120m
21 Apr 10 |  Portsmouth
Storrie quits role at Portsmouth
12 Mar 10 |  Portsmouth
Reaction to Portsmouth's plight
26 Feb 10 |  Portsmouth
Pompey labelled 'dysfunctional'
26 Feb 10 |  Portsmouth
Portsmouth enter administration
26 Feb 10 |  Portsmouth
Pompey fail to meet wage promise
06 Jan 10 |  Portsmouth
Storrie defends 1m-plus salary
24 Feb 10 |  Portsmouth
Storrie refuses to quit at Pompey
29 Jan 10 |  Portsmouth


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