League One side Portsmouth were given a boost in their fight for survival today when their creditors agreed a Company Voluntary Arrangement that will potentially allow the club to be taken out of administration. Hong Kong businessman Balram Chainrai is the man in the driving seat, after his company Portpin tabled an offer to pay creditors two pence in the pound to reduce Pompey's debts.
Chainrai now has a statutory 28 days to complete the purchase of the club - a period that also allows creditors the right to lodge any objections. There is also a further option on the table from the Pompey Supporters' Trust, who forward an alternative bid last Friday. Administrator Trevor Birch has indicated that he would be willing to consider the detail of their bid during the 28 day period, with the implication that if they can better Chainrai's offer he may allow them to takeover the club.
Portpin are one of Portsmouth's creditors, and are owed in the region of £19 million according to the BBC Sport website, and have already owned the club during the 2010-11 season. That's part of a total of £58 million worth of debts that were at stake today, after the Hampshire club collapsed into administration for the second time in recent years.
Birch has warned that today's news does not resolve all their issues - Birch suggests that Chainrai and the PST will only complete their bids if the administrator can persuade a number of the club's high earners off their books, with the Portsmouth News indicating that the target is to reduce their wage bill from £9.5 million down to £5 million before either deal will go through. With current players demanding pay-offs and back-payment of wages to leave the club there is no guarantee that will happen.
With the Football League's rules on Football Creditors meaning all players have to be paid in full in order to avoid further penalties, the administrator warns that liquidation is still one possible outcome. However, for now Portsmouth have overcome one significant hurdle - July 23rd though is regarded as the date they really need to meet in order to guarantee their survival.
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