Portsmouth rescue deal to return 2p in the £1

by Rachael Singh

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11 Jun 2012

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PORTSMOUTH FC ADMINISTRATORS have issued a rescue deal which will see unsecured creditors receive about 2p for every pound owed.

However, the potential new owners have promised to settle outstanding wages for part-time club employees (prior to it entering administration), and debts owed to charities as well as small local businesses owed less than £2,500.

The Championship club entered administration for the second time in two years on 17 February, with PKF partners Trevor Birch, Ian Gould and Bryan Jackson appointed.

All clubs in both the Premier League and Championship must exit administration via a Company Voluntary Arrangement (CVA). A CVA needs 75% or more of creditors, by value of debt, to approve the deal.

Birch said: "We believe that these proposals are likely to give the best possible deal for creditors and provide the most realistic opportunity for protecting the club's financial position and avoiding liquidation.

"There has been a considerable amount of interest in the club over the past few months but nobody has been able to prove their ability and willingness to complete on a purchase other than Portpin."

Creditors will vote on the CVA later this month.

The CVA at Portsmouth FC is based on an offer from former owner Balram Chainrai's company Portpin.

"If approved, the proposal will also ensure the club's survival and give the club an opportunity to steady itself and get back on its feet after a troubled few years," said Balram Chainrai.

"Ultimately, the CVA is conditional upon reducing the wage bill of the club and agreeing compromise agreements with certain players but we are confident that the administrators will be able to deliver this."

The administrators said in a statement they hope to convince former parent company Convers Sports Initiatives to drop its £11m claim against Portsmouth, which would see repayment to unsecured creditors double to 4p for every pound owed.

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