Portsmouth will be insolvent unless €23m raised by March

ENGLISH PREMIER LEAGUE: THE FULL extent of Portsmouth's dire financial position can be revealed today after it was learned the club are set to be declared insolvent unless they can demonstrate to the high court in Britain on March 1st that they can bring in a cash injection in excess of €23 million.

A total of €25 million is required for Portsmouth to continue as a going concern until the end of season, otherwise they will fold. However, this depends on the Premier League’s bottom-placed team finishing 17th as all the club’s forecasts have been based on avoiding relegation. If the club finish 20th then around €30 million will be required to keep Portsmouth afloat. Even if Portsmouth were to enter administration, a total of around €16 million would be required.

In a move that will anger fans, sources also claimed the owner, Balram Chainrai, will be sold the freehold of Fratton Park to pay off €11.3 million of the €19.3 million the Hong Kong businessman is owed. He would then lease it back to the club for a minimum of 15 years for a rent of more than €1.1 million for the first year, before the rate rises.

Portpin, Chainrai’s holding company, will also consider sourcing finance should administration be entered. This offers the firmest evidence yet that Portsmouth are preparing for such an eventuality.

The stricken south coast club are due to return to the High Court on March 1st to hear the winding-up petition served before Christmas by the Revenue and Customs in Britain.

The statement of affairs, prepared by the accountancy firm Vantis, was received by the court on Wednesday and it is currently being examined by HMRC and its lawyers, in addition to the judge who will adjudicate the case.

On March 1st the statement of affairs will be heard in public for the first time. The winding-up petition concerns an unpaid bill for €13.7 million in PAYE, VAT and National Insurance, though the club is disputing €8 million in VAT.

It was revealed yesterday that a Hong Kong-based investment company, Endeavor Plan, has informed Peter Storrie, the chief executive, of a potential interest in becoming the club’s fifth owner this season. A South African consortium is also understood to be considering making a move, although neither approach has so far resulted in a concrete offer.

Guardian Service