Investigation ongoing, £97k commercial payment, £900k stadium haircut: Sheffield Wednesday admin report
Administrators at Begbies Traynor have published their latest reports pertaining to the processes at Sheffield Wednesday.
An administrators report published this week confirms that the £7.4m owed to New Avenue Projects for a charge on Hillsborough stadium was negotiated down to £6.5m as part of the sale of Sheffield Wednesday to US consortium Arise Capital Partners - and that investigations into director conduct in the time leading into administration are ongoing.
Reports on the administration of both Sheffield Wednesday Football Club Ltd and Sheffield 3 - the company that owned Hillsborough and was formerly owned by Dejphon Chansiri - have been published to Companies House and provide details to creditors on a number of matters including progress reports and financial commitments throughout the period of administration to date.
Takeover and stadium payment
Much of the detail in the Sheffield Wednesday report was covered in an earlier publication of the statement of administrator's proposal published in early March. It does outline that a sum of nearly £97k was paid to an unnamed football creditor as part of a commercial agreement with Arise. It is stated that further details will be included in a later report.
The latest publications are a mandatory six-month progress report coinciding with the fall of the club into administration on October 24 and does not represent a closing report on behalf of BTG, which will be released in due course. The report does state that “Following the launch of the revised expedited sales process, only two bids were received by the prescribed deadline. Of these, one was considered to be a credible offer, submitted by Arise Capital Partners LLC ("Arise"), demonstrating both the financial capability and deliverability required to progress a transaction of this nature. Accordingly, Arise was selected as the preferred bidder and subsequently entered into a period of exclusivity with the Administrators in order to progress the proposed acquisition.”
The ultimate breakdown of the sale price of the club, which The Star has reason to believe resembles somewhere in the region of the £12.1m share issue placed into the consortium’s holding company last month, will be confirmed in the closing statement.
“Shortly following the period of this report, on 1 May 2026, the sale of the Club and Stadium was completed to Arise,” the club report reads in part. “The consideration apportioned to the Company arising from the transaction is not reflected in the receipts and payments account for the period, as completion occurred after the reporting date. Full details of the transaction, including the associated realisations, will be provided in the next progress report.”
A charge held by New Avenue Projects (NAP) over Hillsborough Stadium was owed by Sheffield 3 and effectively by the club, with work having been undertaken to force the hand of former chairman Dejphon Chansiri to put the two businesses into the same administration process prior to the October 24 undertaking.
That charge had been rolled over from an initial at just over £7.3m, with the charge appearing to have previously been ‘rolled-up’ with interest and annually re-issued from a sum of just over £6.4m in September 2020. The Star reported in the last months that the figure owed had grown, though the report makes clear the payment made to NAP will come out at £6.5m, with £700k rolled out into professional costs.
Exclusivity payments
As previously outlined, an non-refundable £4.1m was paid to the club by a consortium led by James Bord, which withdrew from their status as preferred bidder in late March. The report shows that since Arise picked up the baton as preferred bidders, around £1.3m was paid in exclusivity fees, which will effectively be included as part of the sale price.
The report reads in part: “Following the withdrawal of the previously identified preferred bidder, an expedited marketing process was undertaken, resulting in a different preferred purchaser being identified... The newly identified preferred purchaser then entered an exclusivity period and paid £1,331,000 in accordance with the agreement. Creditors should note that, following completion of the sale, this £1,331,000 formed part of the total consideration payable.
“Accordingly, exclusivity-related receipts totalling £5,471,000 have been received by the Company during the period of this report. It should however be noted that our next progress report will confirm the exact split of sale proceeds, of which the £1,331,000 formed part of.”
Creditor payments
Much was made of the EFL’s ‘minimum dividend’ rule that appeared to make it necessary for unsecured creditors to be met with a realisation of 25% of their creditor claim in order for Wednesday to exit administration without threat of a 15-point deduction heading into next season. Amid emotional in-stadium fanfare on the unveiling of the club’s new ownership ahead of the Owls’ final day win over West Brom on May 2, it was confirmed that any points deduction had been avoided.
The circumstances relating to this are well documented, with majority creditor Chansiri having been offered a deal that left all parties comfortable enough to ultimately waive the points deduction threat. As reported by The Star, Chansiri narrowly missed a deadline to accept that deal and as things stand, the understanding is that he will not receive payment for his claim.
The report concludes that ‘certain’ creditors will however receive their 25 per cent payments as agreed as part of the agreement with the EFL, though these payments will effectively be made outside of the administration process.
It states: “Based upon realisations to date and estimated future realisations, we anticipate there will be insufficient funds available to enable a dividend to be paid to the unsecured creditors from the administration estate. However, pursuant to the terms of the sale of the business and assets and in line with an agreement reached with the EFL, Arise have agreed to make a payment equivalent to 25 pence in the pound to certain unsecured creditors directly.
“This payment will be made outside of the Administration process. Eligible unsecured creditors should therefore monitor correspondence from BDO, who are acting on behalf of Arise, in due course regarding the submission of claims and the process for receiving payment.”
Director investigations
One of the matters reported by The Star amid the publication of the March proposals was the investigation of director conduct in the three years preceding BTG’s call-in as administrators. Ousted chairman Dejphon Chansiri was the only named director in the company, though others may have been recognised as de facto directors. ‘Substantial’ investigations have taken place and the latest publication suggests this work is ongoing across both Sheffield Wednesday and Sheffield 3, with several matters requiring further clarification.
The SWFC report reads in part: “We have a statutory obligation to review and investigate the Company's affairs prior to our appointment. This process involves a detailed examination of the Company's books, records, and financial documentation. In addition, we are required to investigate the conduct of the director and any individuals who may have acted as shadow or de facto directors during the three years preceding the appointment, with particular focus on their management of the Company and the circumstances leading to its failure.
“Within three months of appointment, we must submit a confidential report to the Department for Business, Energy and Industrial Strategy ("DBEIS") setting out our initial findings. Since appointment, we have undertaken substantial investigatory work into the Company's affairs and the causes of its failure. This work has identified several matters requiring further clarification. As these investigations remain ongoing, it would be prejudicial to comment further at this stage.”
The Sheffield 3 report reads in part: “The Joint Administrators are continuing to pursue a number of lines of inquiry into the dealings and affairs of the Company prior to their appointment, however, due to the ongoing nature of our investigations, they believe it would be prejudicial to their investigations for them to comment in any further detail at this stage.”