Portsmouth future secure despite debt raising by £17 million

By Andrew Warshaw in Portsmouth

May 6 – The future of debt-ridden English club Portsmouth looks likely to be secure despite the club being hit with a new claim for unpaid tax.

Administrators running the affairs of the FA Cup finalists told a tense creditors meeting today that debts have now soared to £138 million following a further £17 million claim from the Inland Revenue.

The claim is understood to involve player salaries and image rights and is being invested as the administrators attempt to find a new buyer for the ailing Premiership club.

More than 100 creditors attended the meeting at Portsmouth’s Fratton Park ground during which heated exchanges took place between individual creditors and a four-strong delegation from administrators UHY Hacker Young concerning the actual amount of debt that had been incurred and the level of responsibility among former Pompey directors.

Journalists were barred from quoting verbatim from the meeting which often threatened to boil over but administrator Andrew Andronikou admitted that he was surprised to receive the new Inland Revenue claim which served only to highlight months of mismanagement under a series of owners.

Despite the soaring debt, however, Andronikou announced that most creditors would receive a minimum 20 pence in the pound – a reasonable sum given previous pessisim – on a day a Company Voluntary Arrangement (CVA), a repayment deal that should secure Portsmouth’s future, was approved.

Andronikou hopes the CVA will attract new investors by putting the club on a safer financial footing though there was considerable confusion over another previously unknown claim, this time by the Football League Pension Fund, apparently for a staggering £50 million.

The fund is not run by the Football League but for non-playing employees of all the clubs and Andrinikou played it down, saying Portsmouth’s outstanding contribution was a mere £34,000.

“I don’t think it’s a real debt, I have this idea that it covers the whole Football League pension fund and not just Portsmouth,” he said.

With the CVA, Portsmouth should now be able to come out of administration ahead of next season which they will start in the second tier of English football having been hit with a nine-point deduction.

The CVA will be drawn up over the next 10 business days, with a further meeting then be arranged within 14-28 days to approve it.

It expected that Portsmouth’s parachute payments will help fund repayments to football creditors while the wage bill will be slashed by three-quarters during the summer with 11 players out of contract.

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