Mandaric arrives in Sheffield as talks continue to complete Wednesday takeover

The Leicester City chairman travelled to Sheffield and held talks for the first time with Owls chief executive Nick Parker and chairman Howard Wilkinson.

Sources at Hillsborough described the meeting as 'cordial and progressive' and there is now real optimism that a deal can be finalised in the next few days.

Mandaric, 72, is still in negotiations with the board and loan note holders but has already agreed a 7m package with the club's major creditors, the Co-operative Bank.

With just five days to go before the Owls are due back in the High Court to fight one of two winding-up orders over unpaid tax, Mandaric is now regarded as the best way to end the club's financial nightmare.

Although the 'One Wednesday' group, led by Sheffield-based businessman Garry Scotting, are still waiting in the wings to help, they have also welcomed the possibility of Mandaric finalising his deal.

Speaking to the Yorkshire Post last night, Scotting said: "If this deal is done, we would welcome the arrival of Milan Mandaric at Hillsborough. He has moved other clubs forward in the past and has got the money to make the investment required. He is a new broom which is exactly what our club has needed at the club for a long time."

Scotting also stressed that, if the Mandaric deal collapses, 'One Wednesday' have now raised approximately 4m and would be in a position to help the club avoid being wound up.

Mandaric, who was Portsmouth chairman for eight years before resigning in 2006, recently sold his shares in Leicester City to Thai investors for a reported 40m and is keen for a fresh challenge in football.

The Serbian-born businessman was due in court yesterday to face charges of tax evasion relating to his time as owner of Portsmouth. That case has now been adjourned until January. Mandaric, along with former Portsmouth manager Harry Redknapp, and former chief executive Peter Storrie deny all charges and lawyers representing the trio are seeking to have the case dismissed.

The Owls took steps of their own to raise money yesterday by allowing striker Marcus Tudgay, pictured, to move on loan to Championship club Nottingham Forest with a view to a permanent deal worth around 500,000.

Tudgay, who had been the subject of 1m bids by Blackpool and Burnley in the last two seasons, recently lost his place in the Owls side but is under contract for another two seasons.

Although the Owls do not get the transfer fee until January, they start saving immediately on his wages which were believed to be around 7,000-a-week. There may also be a loan fee involved.

Manager Alan Irvine said: "We are in a position where it would have been very difficult to stop this deal from happening. Marcus was keen to go, as I am sure people can understand, and it was something that was felt to be in the best interests of both the player and the club.

"Even if he had been featuring for the first team, Marcus would still have been keen to take this opportunity to join a Championship club chasing promotion and it is a club near to his home in Derby," he added.

"I am not frustrated by the sale because I know the situation here. I have been working in these circumstances for months now. It's something that cannot be helped but, hopefully, will be resolved to the benefit of everyone connected with the club in the very near future."

Asked to comment on the possible arrival of Mandaric as new owner and chairman, Irvine said: "Until something is done and dusted, I can't spend too much time worrying about it. We have been in these situations before but hopefully, a deal will be done, and then we can find out what it means for me as manager and what it means for the team on the pitch. If I am told we are in a position to start looking to bring in players then that would be terrific."

The Owls will be plunged into administration if they do not have the 400,000 required to settle their VAT bill next week.

They also owe a further 1.4m in PAYE which is due to be dealt with by the High Court on December 18.