A report this morning claims Town's current debt to be £54.237 million. This figure includes the £25 million bond, player wages, the bank overdraft and other debts.

Although often referred to as a simply a debt, this figure is more accurately described as the club's potential debt in the event that the company is wound up. Player contracts (which under Football League rules must be met in full) make up £18.724 million of the £54.237 million.

The £25 million bond which helped pay for the two new stands and the building of the academy and training facility on Playford Road is also included in the figure.

Norwich Union, the bond holder, have agreed in principle to a restructuring of the payments beyond the 25 years originally planned. This is presumably designed to give the club a greater percentage of season ticket sales to play with while they are paying out on the CVA.

Under the existing agreement the club are set to make their first capital repayment in 2004, at a level which would account for around 10,000 season tickets at current prices.

Town owe £2.070 million in Income Tax and National Insurance as well as £1.589 million to Customs in VAT.

The club's overdraft to Barclays Bank is £5.067 with the debt rescheduled for up to 12 years under the plan.

Other businesses, many of them smaller suppliers to the club, are owed £10 million. These unsecured creditors will receive 5p in the pound in September with a further 5p following in seasons where the Blues are in the Premiership, up to an overall 20p in the pound. If Town are subsequently relegated to the First Division then unsecured creditors gain nothing in those seasons.

Preferential creditors will receive 20p in the pound this September, with 10p in the pound to follow in each of the next three seasons. This would rise to 40p in the pound if the Blues are in the Premiership until full payment has been met. If the club then return to Division One then payments are reduced to 10p in the pound.

The CVA is now made up of two scenarios over four years rather than three over five as had earlier been planned. The proposal assumes that Town will be spending next season in Division One, presuambly to help with refinancing required even if the club is promoted in May.

It requires the agreement of 75% of creditors by value at the May 2nd meeting, something that looks certain to happen. The club has been meeting with the major creditors throughout their time in administration in order to produce a CVA which is acceptable.

In the unlikely event that the CVA is turned down the club and administrator would look to produce another proposal. Should this also fail the club would go into a sale of company assets situation as occurred at Leicester City earlier this season. Then it is likely that, as at Leicester, unsecured creditors would receive nothing.

Once the CVA is agreed at the creditors' meeting at Portman Road, the club will come out of administration. At the next Football League board meeting the club will have its transfer embargo lifted and Joe Royle will be free to bring in players, although he won't be in a position to immediately splash too much cash. Football League board meetings are monthly so this may not happen immediately.

From there the club will look to refinance with chairman David Sheepshanks having already announced a loan stock, debenture scheme and a share issue which they are planning for the end of the summer.

The club's plans for refinancing have not been helped by Barclays and other banks refusing to allow clubs access to all their season ticket revenue in the summer. Instead they will be given access to installments at periods throughout the season.

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