Portsmouth's tax bill forces debts up by further £18m
Friday 07 May 2010
Just when it seemed the situation at Portsmouth could not get any more perilous, the club announced yesterday that their debts are now £138m, £18m more than was thought.
In April, administrator Andrew Andronikou announced debts of £120m as he published a long list of creditors. However, that figure has now risen by almost £20m, and is reported to have been revealed by Andronikou during a creditors' meeting at Fratton Park.
Portsmouth were relegated after being deducted nine points by the Premier League, but have since gone on to reach the FA Cup final. The financially stricken south coast club are hoping to be able to finalise a Company Voluntary Arrangement (CVA), which will allow them to come out of administration ahead of the new campaign in the Championship, and so avoid a further points sanction.
Creditors include the taxman as well as former owner Alexandre Gaydamak, and obtaining a CVA requires a 75 per cent approval, with Andronikou reported to be ready to offer a settlement between 20p and 25p in the pound.
It is understood the increase in Pompey's overall debt is due to charges from Her Majesty's Revenue & Customs, which is owed £17.1m in taxes and National Insurance contributions. Portsmouth's current owner, Balram Chainrai, has an outstanding £14.2m loan, which must be repaid in full, while Pompey's "football creditors" – including the Football League pension fund, other clubs as well as current and former players – are also set to have their debts covered.
While it may not seem a level playing field for the rest of the businesses and individuals still owed monies by Pompey, Premier League chief executive Richard Scudamore maintains such rules are necessary to protect the sport.
"If you want to keep your status in the pyramid of football, in the 92, you have to pay off those people around you, because you are forced to trade with them again," Scudamore said. "If a local business goes bust and someone does not pay, you can go and trade with someone else – there is always another plumber or another builder, somebody else to go and do business with.
"In football, you stay in the ladder, and the cost of staying in the ladder is you have to pay the clubs around you in the ladder. It is a football rule."
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