Portsmouth FC on brink of collapse

Portsmouth FC on brink of collapse

Portsmouth FC have tonight announced they are on the brink of being closed down.

The club released a statement saying that the club faces going out of business unless a deal with former owner and creditor Alexandre Gaydamak and prospective buyer Balram Chainrai can be struck - described as "impossible" in a statement from Pompey.

Portsmouth were relegated from the Barclays Premier League amid financial strife last season, during which they were docked nine points for falling into administration. The club remains in administration.

It was revealed in April that Portsmouth owed a combined total of £38.2m to previous owners including Gaydamak and Sulaiman al Fahim, out of a total debt of £119m.

Friday night's club statement, published on the Portsmouth website ahead of Saturday's scheduled npower Championship match at Hull, said the Football League plus Chainrai's proposed new company, administrators and legal advisers have made "extensive efforts" to keep the club in business.

However the club said Gaydamak had on Friday requested a "very significant" cash payment to be made, and that was refused. Portsmouth called it "a ransom payment".

The statement said: "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 up front 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 Friday morning specifically for the purpose of witnessing his signature to the document agreed Thursday.

"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."

The statement added: "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."

The club statement attacked Gaydamak, accusing him of failing to take into consideration those involved with the club he bought in 2006.

“We would like to thank the Football League in particular for their support and assistance through this difficult process,” the statement read.

“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, who had granted him freedom of the city in 2008.

“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.”

Should the worst-case scenario unfold, Portsmouth would become the first Football League club since Maidstone United in 1992 to go out of business. In the same year Aldershot were also closed down.

Several clubs have encountered life-threatening financial trouble since then, but have managed to survive or go out of business after drifting into non-league.

Portsmouth became the first Premier League club to enter administration, and the subsequent nine-point penalty left them with no hope of survival.

Manager Avram Grant left in the summer to join West Ham, to be replaced by Steve Cotterill, and a host of players departed Fratton Park, leaving behind a thin squad.

The team made a slow start to the season but have hit form lately, winning four of their last five matches and drawing the other, however the off-pitch troubles have continued.

Their bid to come out of administration was scuppered by the Football League eight days ago.

Officials decided not to approve the transfer of the club’s Football League share, which would signal their exit from administration, until further conditions were met.

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