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Milan Mandaric closes in on Sheffield Wednesday rescue

By Matt Slater

Milan Mandaric
Mandaric has a long track record in football and money in his pocket

Milan Mandaric has told BBC Sport he is "24 hours or less" away from being able to rescue Sheffield Wednesday.

Mandaric first emerged as a saviour for the Owls a fortnight ago, only to apparently pull out last week when his approach was rebuffed by key creditors.

But with administration looming, the current Leicester City chairman has returned to the negotiating table.

"I've made no secret of my desire to help the club - I hope I'm not too far from the line," said Mandaric.

"I have given my representatives the green light to see if they can close the deal.

"Things are in the hands of the [Co-operative] bank now but they're being very helpful. I hope they'll get back to us in the next day or two and we'll be able to do some serious business.

If I get involved (at Wednesday) I'll just be a maintenance man, not an owner

Milan Mandaric

"They know we're credible people, very football orientated and we're capable financially. So I don't know what else they'd need."

Relegated from the Championship last season, Wednesday were given a 28-day stay of execution against an HM Revenue and Customs (HMRC) winding-up petition last week but face another bankruptcy challenge from the taxman next week.

With their tax bill now at £1.4m and total debts of almost £30m, the Owls cannot risk another trip to the High Court without finding significant new investment or protecting themselves against liquidation by opting for administration.

Wednesday's situation is complicated by the nature of their debt: £23.5m to their bank, the Co-op, and £3.5m in loan notes from six current or former club directors.

Mandaric, the former Portsmouth owner who recently sold Leicester City for a reported £40m, thought he had reached a deal that would enable the bank to walk away without placing the club in administration - a last-resort option that would bring considerable reputational damage to the bank's brand.

This deal would return only 30% of the Co-op's loans, approximately £7m, but crucially it would happen immediately as Mandaric had placed that amount in an escrow account. With no other bidder making such a statement of intent, the bank hoped this could be its way-out. The Co-op was therefore dismayed when the club rejected his approach.

(The 'One Wednesday' bid) is the best short-term answer for the club to move forward

Former chairman Lee Strafford

Initially it seemed the stumbling block was Dave Allen. A former Owls chairman and current majority shareholder at Chesterfield, he is the second largest creditor at Hillsborough with outstanding loans of £1.5m and rejected Mandaric's repayment offer as "derisory".

It soon became clear, however, that Allen was not the only obstacle, as current director Ken Cooke and former director Mick Wright were planning their own takeover. Mandaric's negotiations with the Co-op flushed out their interest and set the price for dealing with the bank.

As last week's HMRC deadline approached, these two seemed to be in the box seat, and this certainly looked the case when the club persuaded a Companies Court registrar it should be given more time to settle its tax bill because of "advanced talks" with Cooke, Wright and another local businessman.

The identity of that third party became clear this week when Garry Scotting, the owner of a car dealership chain in Sheffield, announced he was in negotiations with fans' groups to find a community based solution to the club's problems.

The details of that plan, One Wednesday, emerged on Tuesday: a three-strand approach to raise money from a small group of wealthy fans willing to commit at least £500,000, a larger group of investors able to pledge £100,000 and smaller contributions from the wider fan-base.

Sheffield Wednesday
Wednesday's Hillsborough HQ has seen more lows than highs in recent years

The immediate goal would be to raise £6m by next week to settle the tax bill and fund the club for another 18 months. Anybody delivering £500,000 would be given a seat on a new board, with fans' representatives being appointed according to the contribution from the general appeal.

Scotting's plan has been well received but his earlier association with Cooke and Wright has not, as many supporters want a clean break from the old regime. Whether this explains why the two loan-note holders are no longer working with Scotting has not been explained - it seems they are still working towards their own buy-out.

Another former chairman Lee Strafford, a vociferous critic of the current board, has welcomed the One Wednesday bid.

"It's the best short-term answer for the club to move forward," he told BBC Sport.

"It would cut the ties to the past and put in place funding that could get the club back to the middle of the Championship.

"But most importantly it creates a community partnership between fans and local investors, with a long-term commitment to bring in outside investment. I would like to see all Wednesday fans get behind this as it could recreate the strength the club had in the 1980s and early '90s."

But both Scotting and Strafford know the odds are against them raising enough money before the club-set deadline of Friday. They must also broker deals with all the key creditors.

"If meaningful progress is made, the Co-op will support this," said Strafford.

"My worry is that if this progress is offset by more poison from the boardroom, Co-op will opt for administration."

As attractive as the One Wednesday scheme is to many Owls supporters, Mandaric's offer is the more concrete and he has gone much further with the Co-op. He is also keen to promote his own fan-friendly credentials.

"I am a people person and supporters are the key people," he stated.

"If I get involved [at Wednesday] I'll just be a maintenance man, not an owner. The club will belong to the community. It will not just be Milan Mandaric, it will be us."

Mandaric is due in court on Thursday, facing tax fraud charges relating to his time in charge at Pompey.

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see also
Fans group consider Sheff Wed bid
23 Nov 10 |  Sheff Wed
Owls given time to clear tax bill
17 Nov 10 |  Sheff Wed
Owls on verge of administration
14 Nov 10 |  Sheff Wed
Mandaric considers Owls takeover
12 Nov 10 |  Leicester
Owls face second winding-up order
09 Nov 10 |  Sheff Wed
Owls investor pulls out of deal
03 Nov 10 |  Sheff Wed
Mandaric dismisses Pompey return
04 Oct 10 |  Leicester

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