By Nick Harris
21 April 2010
The administrator of Portsmouth, Andrew Andronikou, last month revealed exclusively to sportingintelligence the true extent of the club’s debts was closer to £100m than the £60m widely reported and now in an extraordinary document available for public scrutiny – parts of which we extract here – he has laid out the debts, penny by penny.
In a 70-page report, Andronikou reveals that the club now owes £105m, of which £91m is to “unsecured creditors” and £14m in “secured” debt to Balram Chainrai, the most recent owner before the club went into administration.
Reports elsewhere of debts of £119m are misleading. The £14m difference between the real figure of £105m and the £119m arises from debts of £14m owed to Portsmouth, not by them, in unpaid fees still owed by Internazionale, Liverpool and Tottenham for Sulley Muntari, Glen Johnson and Jermain Defoe.
Portsmouth, knowing that money was due, “borrowed” it in “advanced payment” deals from financial institutions. Thus that money is owed to those institutions by those clubs. It is not, strictly speaking, part of Portsmouth’s debt.
The £105m is Pompey’s debt, however, and details of who is owed what is all laid out in the 70-page report prepared by Andronikou for the club’s creditors to paint them a picture of the awful financial mess at Fratton Park.
The document is snappily titled: ‘Portsmouth City Football Club Ltd (In Administration); Report to Creditors pursuant to Paragraph 49 of B1 of the Insolvency Act 1986’.
Page turner? You bet, not least the sections detailing those parties owed cash by Pompey. We carry four pages of scanned extracts below.
The first page details the £17,303,817 (and 87p) owed to a variety of clubs in unpaid transfer fees. Chelsea are still owed more than £1m for Johnson, who has already gone to Liverpool, for example, why Udinese are owed cash for Muntari, now back elsewhere in Italy.
The second scan details unpaid historic bonuses totaling £1,866,352.40, including £282,000 owed to Peter Crouch among other players.
The third scan shows money owed to 26 agents and scouts, including £2,074,352 (and 90p) owed to Pini Zahavi, £225,000 owed to Willie McKay and six-figure sums owed to a variety of middle-men and talent spotters from Spain, Monaco, Dubai, Jersey, Jerusalem, the Czech Republic, Switzerland and elsewhere.
The fourth scan details the money owed to former owners of Portsmouth via various companies: a total of £38,258,884.
Elsewhere in the full document, Andronikou reveals HMRC is owed £17.1m in tax, NI contributions and VAT, while a 15-page section of “trade creditors” is a roll call of fiscal heartbreak for local businessmen, service providers and utilities firms alike.
At a typical 30 creditors per page, there are well over 400 trade creditors. A local school is owed more than £40,000, though for what the report does not say.
St John’s Ambulance is owed £2701.91. The Scout Association is owed £697. (Perhaps a previous owner was trying to earn a badge of some sort? For adventuring, maybe?).
Then there is £1,725 owed to Fruity Faces Limited of Esher, a firm that a quick web search informs us “designs and manufactures individual fruit cases that keep fruit fresh and cool and ready to eat whenever a child is ready. Key to their success has been the fun design of the packaging which appeals to children. This innovative product has already helped many parents to increase their child’s consumption of fruit.”
Make your own jokes about the whole scenario being bananas.
So what happens next? All the creditors will read Andronikou’s astonishing and painstaking report then attend a meeting at 11am on 6 May (general election day) at Fratton Park, when the administrator will tell them how many pennies in the pound he is offering to settle their debts.
That figure is likely to be in the region of 20p to 23p we understand, although Andronikou insists that he has yet to decide and will not speculate.
If creditors holding 75 per cent of the total unsecured debts or more agree to the deal by a set date thereafter (6 June is likely), then Pompey will emerge reborn from administration, in the Championship.
Andronikou’s report can now be downloaded from the Hacker Young website.
IN THE RED – Scans below show:
1) clubs owed transfer money
2) players owed bonus money
3) agents and scouts owed fees
4) former owners owed money