Source: Telegraph
Portsmouth serve notice of administration
Portsmouth face a winding-up order from Her Majesty's Revenue and Customs on Monday, and with the prospects of a deal with potential buyers being concluded by the end of the week fading, Chainrai will choose administration ahead of liquidation. [LNB]As disclosed by The Daily Telegraph on Monday, the Hong Kong businessman has engaged an insolvency expert, Andrew Andronikou of accountancy firm UHY Hacker Young, who will handle the administration if and when the time comes. [LNB] Related ArticlesPompey talks continue as administration loomsSulaiman al Fahim exit plan shocks PortsmouthPortsmouth 1 Stoke City 2Premier League reject Portsmouth bid to sellPompey debts worse than fearedSport on televisionShould Chainrai take the club into administration they will be hit with a nine-point deduction, reducing their season's tally to seven points from 26 games and making relegation a certainty. [LNB]The club should be able to fulfil their fixtures however. Chainrai met the Premier League to discuss developments on Tuesday. [LNB]Administration should ensure that the winding-up order is suspended, but on Tuesday night HMRC refused to comment on their position. Lawyers for the revenue are understood to be examining the small print of Portsmouth's statement and will not finalise its position until Friday. [LNB]In a statement released on Tuesday Chainrai's spokesman, Phil Hall, said: "There is now only a short window of opportunity for buyers to come in with a credible offer. We have to be realistic and having the club wound up is not an option as far as we are concerned. [LNB]"Administration would mean the club re-emerging as a healthy financial entity and it would then become an attractive proposition for a potential buyer who could invest new funds in re-building the club's future."[LNB]Chainrai has said he will fund the administration and fund the club going forward, meaning he is likely to have to meet the players' wages of £3 million including tax that are due at the end of the week. [LNB]He may not lose out as dramatically as other creditors from administration. [LNB]Portsmouth's debts total more than £70 million and the administrator's first task will be to ensure it can continue as a going concern. He will then address the creditors. Former owner Sacha Gaydamak claims to be owed £30.5 million and HMRC are understood to be owed £18 million. [LNB]Chainrai is owed £17 million, but may be judged to be a secured creditor after lending the money to the club charged against all their assets, including Fratton Park, and future revenues. [LNB]He is understood to have transferred ownership of the ground to a personal holding company and agreed to lease it back to the club, but this structure could mean he is in line to receive payment in full. [LNB]Gaydamak's position is also critical to the club's future as he owns land surrounding the ground that is crucial to any redevelopment. [LNB]Chainrai's move came after 24 hours of talks with a number of potential investors ended without a deal. [LNB]Chief executive Peter Storrie has championed a South African-based consortium and Chainrai set them a deadline of yesterday afternoon to provide proof of funds and strike a deal. [LNB]It is understood that the South African group were cautious however about some of the revelations made during negotiations. Sources have suggested that recent merchandising licence deals struck by the club, as well as commitments on future revenue, made the consortium reluctant to proceed without further due diligence. [LNB]Negotiations are likely to continue on Thursday, but there is little optimism that a deal will be struck. More likely is that one of the suitors may attempt to buy the club out of administration. [LNB]A spokesman for Gaydamak said the former owner welcomed the move to protect the club from liquidation. [LNB]
