Storrie Confirms Portsmouth Sale Will Be Completed
Peter Storrie Said that there is a “deal in principle” for the sale of Portsmouth for the second time in 42 days – probably a world record – to the oil billionaire Saudi brothers led by Ali Al-Faraj.
Storrie, who broke the news to ESPN Soccernet last week about the full extent of the financial crisis engulfing the Premier League club, told me: “There is an agreement in principle which is with the legal experts, and we expect the lawyers to unravel the whole agreement, hopefully, by Monday or Tuesday.
“But yes we do have an agreement in principle and we are relieved, I am a happy man. Three points at Wolves, and moving toward saving the club – I cannot be happier.”
There are two major hurdles to overcome. Firstly, the Premier League will need to ratify the deal once they have seen full details, although Storrie has told me he has kept the Premier League up to date with all developments. Secondly, the previous owner Sacha Gaydamak is still owed money from the takeover, plus there is the complex issue of land ownership, which makes it all the more worrying for the Premier League.
But as Storrie told ESPN Soccernet, Pompey have been close to folding on numerous occasions since the takeover of Sulaiman Al-Fahim and before it, so he can take credit for saving a club on the brink by bringing in new Saudi investors.
Storrie will now hope for a sympathetic view from the Premier League, as his case will be that this deal is the only one available to save the club from extinction, let alone administration.
Al-Fahim has had control of Pompey removed by the Saudi investment in agreeing to sell the majority of his holding to a member of one of Saudi Arabia’s richest families. Faraj is 50 years old with a personal holding in billion-dollar petroleum giant Sabic.
Storrie, the club’s chief executive, admitted on Friday in an exclusive interview with ESPN Soccernet that at least “30% of the £50 million” was needed by October 15 to save the club – the first part of the refinancing promised by Al-Fahim or Portsmouth faced financial meltdown.
The club’s inability to pay the players’ wages was only resolved by a £5 million bridging loan from the prospective new owner, while Storrie revealed that there were unpaid transfer fees owed to clubs plus at least £3 million due to agents Pini Zahavi and Jonathan Barnett.
In Dubai, Al-Fahim said of Faraj: “I think by Monday or Tuesday he will be on the board. His consortium will be a major shareholder. And I will keep a minority.”
Al-Fahim is currently recovering from an operation in a Dubai hospital for kidney stones that he underwent on Friday, and so had to postpone several meetings in London to facilitate the new takeover. “Due to my situation I will need rest and meet them on Monday,” he said. “My lawyers are in discussion with the consortium lawyers.”
During the summer, Al-Fahim’s takeover became protracted with a longer than expected period of due diligence and scepticism grew regarding his ability to buy the club. Storrie then moved in with the Saudi connection to mount a counter takeover bid – which ultimately fell through when Al-Fahim went ahead with his purchase from Gaydamak.
Concerns over whether the 32-year-old Al-Fahim could provide the finance required to service the club’s crippling debts, and allow Paul Hart, the manager, to buy players in January’s transfer window grew, and finally intensified when the salary for the first month of his new ownership didn’t materialise.
To allay these fears, Al-Fahim told a forum of Portsmouth supporters at a meeting held at Fratton Park 11 days ago that he would raise £50 million by the end of October. Al-Fahim insisted that this finance would still be available. “Still the club can have access to my new funding which will be ready in a few weeks – the £50 million announced,” he said.
Asked whether he would remain chairman after the takeover, Al-Fahim said: “I have no idea who from the team will join the board. Next Tuesday we will have a clear picture.”
Al-Fahim said he would still attend Portsmouth’s next home game, against Spurs on October 17, and added that he has developed a genuine passion for the club. “I have become a fan and I will try and attend as many games as possible. As I said, I am there for the long term and it is good to have a few partners so if one decides to leave, the other can buy more shares and the club is always safe. Therefore, I will be ready to invest more.”
Al-Fahim said he will continue to back manager Hart, despite a run of poor results before the crucial win at Wolves. “I have full respect for Paul Hart and my vote is always for him,” he said, adding of the result: “We deserved it, and [it is] thanks to Paul Hart.” But Al-Fahim’s control of the club is now effectively over.
As well as clubs, agents and other creditors, Pompey are behind in payments to the Inland Revenue, who could threaten a winding-up order over more than £2 million in outstanding payments. The club denied claims that they had already appointed insolvency experts as Storrie is now confident that new money will come into Fratton Park by Tuesday.
British Virgin Islands-based company Falcondrone, whose backers include the Al Faraj family and who had a representative in the directors’ box at Molineux, want to buy 90% of the club from Al-Fahim.
Falcondrone want to proceed with a deal with Gaydamak also selling them the land he owns around Fratton Park through a separate company.
On Friday, lawyers for Falcondrone had £5 million in an account ready to pay the players and other short-term creditors, but the funds were not released because no agreement had yet been reached between Al-Fahim and Gaydamak over the new takeover. Storrie is now confident that the lawyers will unravel all these complications in the next two days. The players will be paid immediately when the new takeover is completed.
Al-Fahim bought the club and stadium from Gaydamak on August 26, and the club were already £1.7 million in arrears on PAYE and National Insurance payments. That has risen to more than £2 million and Her Majesty’s Revenue and Customs are threatening a court petition which could have seen the club wound up before the end of the month.
A number of clubs and agents have agreed to defer payments until the New Year thanks only to Storrie’s connections in the game, but Pompey need to meet everyday running costs and pay other creditors by the middle of this month.
Falcondrone propose Al-Fahim would retain a 10% stake, in return for the £5 million he paid Gaydamak, and might keep the title of chairman for two years.
Under the terms of Gaydamak’s sale of Portsmouth to Al-Fahim, Gaydamak has to approve any subsequent sale if it occurs before Al-Fahim refinances the club. Gaydamak is still providing personal guarantees for loans from Barclays Bank and that the club have loans outstanding to another Gaydamak company.
The deal with Gaydamak also gave Al-Fahim the right to buy for £1 Miland Development (2004) Ltd, which owns various strategic pockets of land around the ground, once he has refinanced the club. The club is an attractive proposition only if it comes with ownership of that land.