POMPEY were forced to pay a quarter-of-a-million-pound ‘ransom payment’ to former owner Sacha Gaydamak as they continued to struggle to stay alive.
The payment was revealed today in a final report to creditors from club administrators UHY Hacker Young.
The 40-page document also revealed that the club’s assets add up to £15.6m – less than the reported £17m Balram Chainrai loaned the club when it was owned by Ali Al Faraj.
Elsewhere the report revealed Mr Gaydamak is still owed £2.4m and at the same time his company Miland Developments is being paid £6,000 a month to enable people to park around the stadium.
The accounts cover the period of administration from February 26 to October 24 last year.
During that time the club only made a loss of £367,662, due to a £6.9m funds injection from the Premier League via parachute payments, and £7.4m from player sales.
The club did not have to touch the £15m that current co-owner Balram Chainrai said he would make available.
Six months after the club went into administration, Mr Gaydamak took out a court order for money held for Pompey by Barclays to be paid to him.
Rather than risk a court case, Pompey offered the former owner half what Barclays held for the club – £249,064.77
Within the report, administrator Andrew Andronikou said: ‘At this time Barclays held funds totalling £498,129.54.
‘I advise that in order to obtain a Deed of Release for these funds it was necessary to pay a ransom payment to AG [Alexander ‘Sacha’ Gaydamak] of 50 per cent of the monies held.
‘I advise that a total of £249,064.77 was therefore paid to AG.’
On October 22, Pompey came dangerously near to liquidation when Mr Gaydamak would not sign papers to allow a new, debt-free, company to be formed. However Portsmouth Football Club (2010) was formed on October 24.
Mr Gaydamak will be paid the £2.4m from money released when the old, debt-ridden company is formally liquidated.
The report also shows that former chief executive Peter Storrie was not only paid £87,638.30 for five months’ work as a consultant, previously reported in The News, but an additional £20,638 – meaning he was paid £128,276.30 for his services after he resigned from the club.
Elsewhere it shows money is still owed to Pompey by Genoa FC for Kevin-Prince Boateng, who was sold in August for 5.75m Euros [£4.9m].
Mr Andronikou said: ‘I confirm the first and second instalments have been received [3.1m Euros/£2.6m].
‘Only £175,000 has been received in respect of the third instalment.
‘The remaining monies under the third instalment are being pursued.’
£900,000 is also ‘heavily overdue’ in relation to the sale of Sulley Muntari to Inter Milan. The issue, which also involves Italian Serie A club Udinese, is in the Italian courts, and Pompey are unlikely to see the Muntari money until it has been resolved.
Facts and Figures
THE report also revealed that:
· Fratton Park is worth £7.04m
· The FA Cup prize money and gate share, plus Carling Cup games, brought in £2.1m
· Pompey is now owned by Sports Holdings (Asia) Ltd, based in the British Virgin Islands
· Claims from companies owed £2,500 or less have been passed to the owners for payment.
· Charities owed money by the football club have been paid
· Sacha Gydamak’s representatives and HMRC voted to appoint Baker Tilly as liquidators, not UHY.
· Around £60,500 was spent on software at the training ground to analyse matches
· Football agents cost the club £108,600 between February and October
· Breakfast and lunch for the first team and the academy came to £41,494.13
· Total ticket sales came to £816,024.76
· Venue hire and bar takings for the lounges earned £20,000
Report reveals cost of club’s administration
THE final creditors’ report also shows how much the administration cost the club.
It revealed that, in total, the administrators worked 4,915.62 hours during the eight months they ran Pompey.
They charged, on average, £222.73 per hour they spent unravelling the club’s finances and setting up a new company to keep the football club operating.
In the report, the administrators said they had spoken to ‘a number of former directors’ in the investigation into what led to the club’s financial meltdown.
Andrew Andronikou said a confidential report has been passed to the Insolvency Service, and a separate investigation will be carried out by Baker Tilly, the accountants in charge of liquidating the old company. During administration, UHY Hacker Young ran up a time-cost bill of £1,094,858.84, plus a separate bill for ‘category one’ expenses, such as hotel rooms, refreshments and meeting room hire, of £88,267.53, and a bill for ‘category two’ expenses such as stationery and telephone calls, of £2,440.
It puts the total at around £1.2m.
UHY’s solicitors, Walker Morris, have cost the administration £1,342,000, excluding VAT. The bill was run up from time spent on the administration, and fighting HMRC in the High Court.