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Chainrai offers creditors 2p in the pound... 19:33 - Jun 8 with 1641 views

See story in today's News

http://www.portsmouth.co.uk/sport/pompey/pompey-past/chainrai-offers-pompey-cred

Published on Friday 8 June 2012 10:59

Balram Chainrai today offered Pompey’s creditors 2p in the pound.

The proposal came as the Hong Kong-based businessman seeks the Company Voluntary Agreement he needs to take over at Fratton Park for the second time and release Pompey from administration.

He says he will settle in full debts owed the charities, businesses owed less than £2,500 and part-time employees of Pompey owed wages.

Unsecured creditors are owed a total of £40.2m by the club.

Pompey administrator Trevor Birch said he believed the offer was the best possible deal for creditors.

Mr Birch, a partner at PKF, and the joint administrator of Portsmouth Football Club (2010) Ltd, has sent proposals to the club’s creditors for a Company Voluntary Arrangement (CVA).

He said: ‘We have written to all of the club’s creditors to inform them of the CVA proposals, which are based on an offer made by Balram Chainrai’s Portpin.

‘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 going forward and avoid 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.

‘Portpin proposes offering creditors £500,000 in cash as an up front payment. In addition, Portpin will settle in full the club’s debts to charities, small local businesses owed less than £2,500 and part-time club employees who are owed wages prior to the administration and who worked for the club during administration. A further £500,000 will be offered to creditors if Portsmouth returns to the Premier League within five years.

‘As a result, PKF estimates that unsecured creditors will initially receive approximately 2p in the pound under the terms of the CVA - although this may rise if Portpin and the administrators succeed in convincing the administrator of Convers Sports Initiatives to waive its claim.

‘The offer from Portpin is conditional on creditors voting in favour of the CVA and certain players agreeing to compromise their future contractual entitlements

‘PKF believes that unsecured creditors would not receive any payment if the club is forced into liquidation.’

Mr Birch added: ‘We have invited all creditors to a meeting at Fratton Park on Monday 25 June at which they will get an opportunity to vote on the proposals. If the CVA is accepted, it will pave the way for Portpin to acquire the club before the start of the next season.

‘PKF will continue to work with Portpin, the Football League and the Professional Footballers’ Association to finalise a long term and sustainable business plan for the club.

‘There is still much to do but Portsmouth Football Club is now a step closer to leaving administration and returning to stability.’

In a statement, PKF said Balram Chainrai had said of the proposal: ‘I am delighted that a CVA proposal has now been recommended to creditors.

‘This proposal has been designed to ensure that the club’s current financial position has as minimal an impact as possible by ensuring that charities, small local businesses and certain employees that have supported the club whilst in administration do not lose out and are paid in full.

‘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. 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 club’s recent history has been well documented but we remain committed to seeing this through so as to get Portsmouth Football Club into a financially secure position off the field and to improve the club’s fortunes on it. The approval of the CVA is vital to this plan as it will ensure that the club does not start the new season with a further points deduction, which is obviously crucial to the club’s chances of returning to the Championship the following season.

‘I would therefore urge all creditors entitled to vote on the CVA to follow the recommendation of the club’s administrators and vote in favour of the CVA so as to help save the club and get it back to the position that it should be in.’