Will the £25m loan be wiped from Wigan Athletic's debt?

Wigan Athletic have been in administration since July 1

The hefty sum is owed to Wigan Athletic’s former owners, Next Leader Fund.

A football club leaving administration needs to pay 25 per cent on non-football creditors’ debt to avoid a 15-point penalty.

That means any prospective new owner would need to find £6.25m to clear the loan, in addition to other amounts owed.

It’s no surprise the figure is one of the main challenges the administrators face as they try and secure a new owner.

But they have not given up hope of challenging the loan and removing it from the bill.

Co-administrator Paul Stanley said: “The £25m is something we are ongoing working on. It’s not rocket science, a quarter of that is over £6m to pay.

“For someone to come in and buy a club with a stadium, two training grounds and a squad of players, to then up the asking price by putting 6m on top... we need to address that.”

His colleague Gerald Krasner previously spoke of a “strategy” to dismiss the loan arrangement.

Football finance expert Keiran Maguire, author of The Price of Football, says he imagined all legal options would be pursued by the administrators and their legal team to show it was a “bad faith” loan.

The history of the loan arrangement – which covered the amount ‘invested’ by previous owners IEC – was tracked in papers revealed this week detailing the club’s unsuccessful appeal against their 12-point deduction.

The report makes it clear the English-based directors - executive chairman Darren Royle, his dad Joe and chief executive Jonathan Jackson - had flagged concerns in May that the loan may breach the EFL's 'profit and sustainability' rules. But the sale to Next Leader Fund went ahead the following day.

A week later, Royle Jnr emailed Au Yeung objecting to NLF’s loan arrangement which required it to be paid back within a year.

“The club had understood the IEC loans were only repayable on promotion to the Premier League," said the report.

With administrators hoping to sell the club within the next two weeks, they don't have long to try and remove the loan from the club's debt. Without it, the non-football creditors' debt is around £4m (of which £1m would need to be paid). The football creditors' debt needs to be paid in full. It is currently at £6m but is likely to drop as more players are sold.

If the loan remains and a prospective new owner can't pay 25p in the pound to non-football creditors, the sale could still go ahead. But it would mean Latics would be docked 15 points and likely have transfer sanctions applied by the EFL.