Finally the second shoe has dropped. On Monday afternoon the directors of Portsmouth Football announced that they have applied for the club to go into administration. The Administrators will be appointed at a court hearing on Friday, assuming the court grants permission. It is expected that the chief Administrator will be Andrew Andronikou of UHY Hacker Young. If granted, the administration will prevent the enactment of HMRC’s winding up petition due to be heard on Monday 20 February.
Mr Andronikou is concerned that matters have got this far. I spoke with him and he said that Balram Chainrai made a payment of £250,000 into the club in December on the understanding that there would be player sales in January to keep the club going until a buyer was found.
He says that there were 'others within the club' that prevented the sales. It was not down to player choice. He plans to investigate how the sales failed to happen. If those sales had gone ahead the club would not now be facing administration, he said.
Mr Andronikou explained that Mr Chainrai stands to lose in terms of both capital and interest on his £17m loan to the club. He said that Chainrai has only ever received two interest payments on the money he initially loaned back in October 2009. Those were £2m from the sale of Kaboul in January 2010 and a payment from CSI during their short ownership of the club.
It was a failure to pay the second instalment of the interest on the loan that triggered their administration. Presumably Mr Andronikou also meant that the club will not realise the full amount that Mr Chainrai is owed if sold out of administration. He did say that there were buyers around.
When asked if he anticipated any difficulties in the court granting administration he was quite clear that he saw no problems at all in that. He expected HMRC to put up some opposition, but nothing that he could not manage. As to whether there was any conflict of interests in him being Administrator for both CSI and PFC, he said there were none at all.
Once the court grants administration on Friday, control will pass from the club’s Directors to the Administrator.
Speaking on BBC Radio Solent on Monday, Pompey’s CEO David Lampitt said the decision for administration had been made to protect the club and its creditors, giving them the best possible chance of a decent return. He stated that the administration order will free up the bank account frozen by HMRC’s winding up petition and allow the club to trade more freely. There had been questions as to whether the game against Ipswich could even go ahead due to the club’s inability to pay bills.
£1m of early parachute money from the Premier League came into the club’s frozen bank accounts at the end of last week. The account holds about £2m in all – including the gate receipts from the game at Chelsea and the fees from the transfer of Ryan Williams. Mr Lampitt told Radio Solent that before Friday’s court hearing the club would be applying to a separate court for a ‘validation order but of very specific amount to cover specific payments that will make sure we can carry on trading through to the administration.’ Until Friday’s hearing the control of PFC’s bank accounts lies with the club’s Directors, after the hearing control passes from the Directors to the Administrator.
As to a potential owner, Mr Lampitt implied there were people out there looking with interest. He was very positive that the club had been on the right track before Mr Antonov’s arrest and the administration of CSI. He said the club is still well worth buying and paid tribute to the support of his staff and the fans.
Developments over the next few days could be interesting. The Pompey Supporters Trust hopes to meet with the Administrator in the near future with a view to seeking to bring the fans to the table in the fight to rescue the club. Meanwhile all fans will continue to show what the club means to them in their own particular style.
The views of SJ Maskell are their own. They do not necessarily reflect the editorial view of pompey-fans.com