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Pompey on brink of administration as talks stall

Balu Chainrai has confirmed Pompey's dark future © Getty Images

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Portsmouth owner Balu Chainrai has confirmed the club will be placed into administration on Friday if a new buyer cannot be found.

ESPNsoccernet has learned talks with prospective investors have stalled and a statement on the club's official website has confirmed Friday is D-Day for any rescue bid.

Immediately after the news broke, Portsmouth's fraught chief executive Peter Storrie, exhausted by the relentless work trying to keep the club out of administration, gave his first interview to Soccernet, and told me: "It's sad, really sad, of course its a sad day for the club.

"After all the efforts we have put in to save the club, to keep the club alive, at least the club will survive, but it's such a shame it cannot carry on in the same way, that cannot happen. Maybe if the Revenue hadn't brought the action that they did, we might have carried on, who knows?

"Inevitably we shall have nine points deducted and that puts us down, another reason that everyone is sad. But the club stays alive and that's the most important. It is heading for administration and that will make us a pretty good bargain, so I would imagine someone will pick the club up quickly enough."

Soccernet have been predicting the club's chronic financial fall since September, and last week reported that administration was a near certainty after the Premier League's decision not to allow the club to sell players outside of the transfer window.

Chainrai is consulting with insolvency experts in preparation for taking the club into administration as last ditch talks on Tuesday failed to bring in their fifth new owner of the season. Chainrai extended the deadline for talks with a South African group for 24 hours until Tuesday but is still not satisfied with their proof of funds. Other interested parties are not in a position to move quickly enough with the winding up order in the High Court just six days away.

Chainrai cannot wait any longer and will not let the club go bust on Monday, believing administration is by far the clearest option left, even though it carries an automatic nine-point deduction and guarantees Avram Grant's team relegation - making the rest of their games pointless.

But with the winding-up order due back in the High Court on March 1 with the club owing £12.1 million, Chainrai is left with no alternative other than to prepare the club for administration.

However, Soccernet understands that he will not formally put the club into the hands of the administrator until Friday, although they will have the rest of the week to assess the depth of the financial problems. Much of the ground work has been done by accountants who lodged a statement of affairs with the courts, and as Soccernet first reported last week, declared the club insolvent.

The administration will immediately freeze the club's £65 million debts; the administrator will then re-negotiate the debts, notably with Her Majesty's Revenue and Customs, agents, other clubs owed deferred transfer money, and even Sol Campbell who is claiming £1.75 million in unpaid wages and image rights.

Insolvency experts would inform Chainrai that administration will enable "the club is stabilized and thus more attractive to financial institutions and investors and from a football perspective it will be business as usual."

According to sources close to Chainrai he "feels he is a victim of circumstances because the loan was only for six weeks, now if club goes into administration he faces problems getting his money back. He and fellow investor Levi Kushnir put in £17 million."

Chief executive Peter Storrie told Soccernet on Tuesday morning that the deal to sell the club to a South African consortium was still a possibility but it does not appear to have been successful. Chainrai and fellow investors from his Portpin investment vehicle are in London to continue talks with representatives of four different groups interested in buying the club, but have had to reluctantly accept that it is now unlikely a deal can be done before a winding-up hearing, due to be heard in the High Court on Monday.

Their spokesman, Phil Hall, said: "There is now only a short window of opportunity for buyers to come in with a credible offer. We have to be realistic and having the club wound up is not an option as far as we are concerned.

"They are the victims of circumstance, having injected funds in the form of a short-term loan to the Al Faraj Group, who subsequently invested the money in the club. The partners have put £17m of their own money into the club and have a responsibility to ensure Portsmouth Football Club survives.

"Administration would mean the club re-emerging as a healthy financial entity. The club would then become an attractive proposition for a potential buyer who could invest new funds in rebuilding the club's future. We would like to ask the fans, the staff and management of Portsmouth Football Club for their support and patience should this step be taken, as they believe it is the only route left open to them.

"The serving of this notice means the winding-up order is automatically suspended. It means the club is safe, it can fulfil its fixtures and as far as is possible it is business as usual. Mr Chainrai hopes the supporters will get fully behind the team as usual for their Premier League match at Burnley on Saturday and the following weekend's FA Cup quarter-final at home to Birmingham.

"Mr Chainrai has agreed to continue funding the club going forward until its long-term future is decided. He will also pay for the administration process out of his own pocket."

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