Portsmouth FC facing closure
After so many trips to the abyss that it had become a second home from Fratton Park, Portsmouth could now be just days away from closure.
At a time when the club’s performances on the pitch were pushing up the Championship table, the off-field problems that dragged them down in the first place now threaten to push a team that was founded in 1898 to the verge of liquidation.
Less than 24 hours before they are due to play Hull City away - a match that is still scheduled to go ahead amid the financial meltdown - Portsmouth took the dramatic step of releasing a statement. In it the club said that it faces ceasing trading unless an arrangement can be rapidly brokered between Alexander Gaydamak, the former owner and still a creditor, and Balram Chainrai, the prospective buyer.
Portsmouth were relegated from the Premier League last season, during which they were docked nine points for falling into administration, with debts that have been estimated at £120million. Of that Portsmouth owed a combined total of £38.2million to previous owners including Gaydamak and Sulaiman al Fahim. The statement said the Football League, administrators and legal advisers and Chainrai's representatives made what was described as "extensive efforts" to keep bring the club out of administration, which would be the first step to financial stability.
However that progress was thrown in reverse when, according to Portsmouth, Gaydamak “demanded a very significant upfront cash payment” which, in language that was far from diplomatic, was described as “a ransom payment.”
The statement said: “Portsmouth Football Club is extremely disappointed to report that it has not yet managed to achieve the exit from Administration, despite the extensive efforts of the Football League, NewCo, the Administrators and their various legal advisors.
“The process has been extremely complicated and there has been a team of people working night and day to get the deal done. The most difficult aspect has been trying to achieve agreement with Alexandre Gaydamak after the remaining parties have agreed the deal and executed the necessary documents, namely the new owners, the Administrators, the Football League and the creditors.
“Unfortunately, despite the new owners fulfilling all the requirements of the Football League and the creditors, and agreeing and signing up to the required terms of the purchase of the club, at the 11th hour the goalposts have been moved by Mr Gaydamak and this has now made the deal impossible to complete.
“Put simply, despite being offered full payment for the secured part of his debt in accordance with the financial plan approved by the Football League, this morning Mr Gaydamak has demanded a very significant upfront cash payment in order to allow the deal to proceed by releasing his security.
“All this is in spite of his lawyers going to Paris this morning specifically for the purpose of witnessing his signature to the document agreed yesterday.
“It is neither in the interests of the club nor its unsecured creditors for such a ransom payment to be made, particularly where the payment is being demanded by one of the authors of the club’s current circumstances.
“In addition, and equally importantly, all of the business plans submitted and approved by the Football League would be fundamentally damaged by such a requirement placed on the club by Mr Gaydamak.
“We will provide further information as soon as possible. However, it appears likely that the club will now be closed down and liquidated by the Administrators as they are unable to support the continued trading of the club.
“We would like to thank the Football League in particular for their support and assistance through this difficult process. All other parties had managed to reach agreement.
“This has now been undermined by the self-interested actions of one individual. Mr Gaydamak has provided confirmation several times that terms were agreed. However, he has continually changed his position in an attempt to exploit the goodwill of the other parties to the transaction.
“By now doing this he has shown complete disregard for the supporters, the club and the City of Portsmouth. His earlier comments when the club went into Administration about doing everything possible to save the club’s future do not appear to reflect his current actions.”
Portsmouth became the first Premier League club to enter administration, and the subsequent nine-point penalty left them with no hope of avoiding relegation. That descent to the Championship was the cue for many of the club’s best, and highest-earning, players to leave along with manager Avram Grant, who joined West Ham.
His replacement, Steve Cotterill, has managed to pull together a squad on the thinnest of resources which, after a faltering start, have won four of their last five matches and drawing the other.
Sadly success off the field has been harder to come by. An attempt to exit administration was vetoed by the Football League eight days ago when officials elected not to sanction the transfer of the club's Football League share, which would signal their removal from administration, until further conditions were met.
However, Andrew Andronikou, the Portsmouth administrator, still said that he believed that both extended administration and the threat of closure can be averted. In an interview in TalkSPORT he said: "Contractual negotiations have stalled this afternoon but I am disappointed there has been a press release. I am still hopeful we can sit down over the next 24 hours and agree a way forward.
“This is a matter that has high emotion as the club is very close to the city but I want to emphasise that in 24 hours we will be back on track and hopefully we can get this matter finally concluded.
“We are as close to coming out of administration as going into liquidation. It is a fine balance and I want to say as little as possible at the moment."
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