http://savantscovenantadvisory.co.uk/news/
+44 2088 192 159

Portsmouth FC on the verge of insolvency

Portsmouth Football Club owes £22million to finish the current football season. Wtih debts at that level, the club is facing insolvency.

When the club’s management stands before the high court on March 1st, they will need to demonstrate that they can generate the cash injection required to stay in the game.

But, to add to their woes, the club needs to finish the season in 17th place of the Premier league to take them out of the relegation zone. The club is currently lying in 20th place, on only 16 points.

If the club finishes the season where they are, they will £26 million to stay afloat. Even if they enter administration, they will need to stump up £14 million.

It is possible that Balram Chainrai, the businessman from Hong Kong who owns Portsmouth FC, may be offered the freehold of Fratton Park to pay off £10 million of the £17 million owed. Fratton Park would then be leased back to the club for a more than £1 million per annum, increasing each year for the next 15 years.

If Portsmouth enter administration, Portpin, Balram Chainrai’s holding company may consider sourcing finances. At this stage in the proceedings, this offer seems the most likely.

On March 1st the winding-up petition served before Christmas will be read, detailing the £12.1 million unpaid bill for PAYE, VAT and National Insurance – although the club disputes £7.1 million of this total figure. These details will be heard by the public for the first time.

Portsmouth FC are so concerned about their possible insolvency, that they have asked the Premier League if they can sell off some of their players. Although FIFA seems to be backing the move, the Premier League are likely to not be so willing.

No Comments »

No comments yet.

RSS feed for comments on this post. TrackBack URL

Leave a comment

Category : Corporate Insolvency,Insolvency news — Tags: , — admin @ 2:31 pm February 22, 2010

  • Categories