2p or not 2p...
A CVA proposal from Balram Chainrai's Portpin has been put forward to the creditors with them offered 2p in the £.
Over to Trevor Birch, with the Pompey administrator saying the following: 'we have written to all of the club's creditors to inform them of the CVA proposals, which are based on an offer made by Balram Chainrai's Portpin.
'We believe that these proposals are likely to give the best possible deal for creditors and provide the most realistic opportunity for protecting the club's financial position going forward and avoid liquidation.
'There has been a considerable amount of interest in the club over the past few months but nobody has been able to prove their ability and willingness to complete on a purchase other than Portpin.
'Portpin proposes offering creditors £500,000 in cash as an up front payment. In addition, Portpin will settle in full the club's debts to charities, small local businesses owed less than £2,500 and part-time club employees who are owed wages prior to the administration and who worked for the club during administration. A further £500,000 will be offered to creditors if Portsmouth returns to the Premier League within five years.
'As a result, PKF estimates that unsecured creditors will initially receive approximately 2p in the pound under the terms of the CVA - although this may rise if Portpin and the administrators succeed in convincing the administrator of Convers Sports Initiatives to waive its claim.
'The offer from Portpin is conditional on creditors voting in favour of the CVA and certain players agreeing to compromise their future contractual entitlements.
'PKF believes that unsecured creditors would not receive any payment if the club is forced into liquidation.'
I would not be willing to bet too much money on that many players 'agreeing to compromise their future contractual entitlements' though!
An invitation to creditors to come to Fratton and vote on the CVA proposal has been offered to creditors on Monday 25th June.
Will this be accepted?
To be honest I am not sure that it will for a number of reasons even though it can be argued that liquidation will mean nothing at all as opposed to 2p of something.
Chainrai WILL NOT let us get liquated though that much we can be sure of.
I would guess that with Chainrai a secured creditor and clawing back all of his money, or at least most of it, over the years creditors would be left with a sour taste in their mouth that they get pittance compared to what he gets, so why would they accept...
Out of principle alone I could see a number rejecting it.
I have to say that I also sit a little uncomfortable at the thoughts that charities and the like will be paid in full by him as have we not been here before! Did Chainrai not previously promise to personally do this, but did he...
Now it is over to The PST, perhaps the fans' bid to wrestle back control of this club is not over as if a better proposal of 2p in the £ is put forward it is game on! That said, and I may be wrong and be defeatist, but it seems like it is looking to be too late to rival him?
Exiting administration without a CVA also remains a possible, to quote a friend, dare I even say a 'probable' scenario!
If the proposal is rejected then Chainrai will takeover I reckon and do just that, exit admin without a CVA, but hey this is just a hunch and I have no basis to back this up...
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