Mandaric asks for supporters help after buying Sheffield Wednesday for £1

The Owls Plc will announce to the Stock Exchange that the club is being sold to Mandaric – the current Leicester City chairman.

Mandaric, 72, has struck deals with all the club's major creditors and loan note holders, paying just under 8m and wiping out the club's 30m debts.

The Serbian-born businessman will wave farewell to Leicester tonight, ahead of a televised Championship game with Nottingham Forest.

His buy-out at Hillsborough will then be approved by shareholders at an Extraordinary General Meeting on Tuesday December 14.

Mandaric finally completed his deal in the early hours of Saturday morning after agreeing to meet the demands of former chairman Dave Allen.

Mandaric originally offered just 250,000 for Allen's 9.5 per cent stake but will now pay 750,000 plus a further 750,000 if the Owls, currently in League One, win two promotions back to the Premier League.

Allen, who has since invested in Chesterfield FC, was owed 2.4m but agreed to waive 900,000 in accrued interest.

"I am delighted for the majority of Sheffield Wednesday supporters and wish the club all the best going forward," Allen told the Yorkshire Post. "It's not my fault that the club got into its current situation because I invested a lot of money. I am glad that I am now off the radar."

On Mandaric, Allen said: "I have never met him personally but he wouldn't be doing this unless he thought he could improve things at the club and eventually capitalise on the situation.

"I think that is something that the club's supporters should always remember."

Mandaric paid a reported 25m to buy Leicester nearly four years ago and is believed to have banked nearly 40m by selling his stake to a Thai consortium.

The Co-Operative Bank, who were owed 23m by the Owls, have agreed to sell to Mandaric for just 7m and sever all ties. It is understood that directors Bob Grierson, Geoff Hulley, and Ken Cooke, along with former directors Mick Wright and Keith Addy have agreed to walk away with less than 50 per cent of what they are owed. However, they will be repaid the full amount if the club wins promotion to the Premier League.

Mandaric plans to chair the club's new board with former manager Howard Wilkinson, currently the club chairman, staying on as a non-executive director. Chief executive Nick Parker will also stay at the club.

The former Portsmouth owner will provide the 300,000 required to pay off a VAT bill at the High Court on Wednesday and also settle the 1.1m PAYE bill that is the subject of a second winding up order on December 16.

Without this deal, the Owls were set to enter administration on Wednesday which would have resulted in a minimum 10 point penalty from the Football League.

Mandaric had been due in court last week to face charges of tax evasion relating to his time as owner of Portsmouth but that case has been adjourned until January. He, along with former Pompey manager Harry Redknapp, and former chief executive Peter Storrie deny all charges and lawyers representing the trio are seeking to have the case dismissed.

Until then, his focus is on turning around Sheffield Wednesday's fortunes and has asked for patience from the supporters.

The Serbian said: "People who know me in the football world are aware I will try and do everything I can to change the direction the football club has been going in.

"But let's not underestimate the amount of work that needs to be done to do this.

"Everybody involved with the club needs reuniting, they all need to be pulling in the same direction."

This lunchtime he added: "The reason I accelerated my decision of late was for two reasons: the unbelievable response from supporters, which is something I thrive on, and secondly I didn't want to see the club go into administration, especially now they have got some good momentum on the pitch.

"It's a challenge but I shall asking every member of the club, the supporters, to help me, because it's not just Milan Mandaric.

"There are many things we can achieve, it was once a tremendously successful club."

On the events leading up to the deal, Allen added: "I got a phone call at 9.30pm on Friday asking if I was available to sit down with the lawyers to sign the papers.

"We met at Napoleons Casino and the deal was done just after midnight."

Reflecting on his time at Hillsborough, he said: "I was chairman for three years and I took over when the club was in the First Division (Championship). We went down but we got them promoted again, signing a lot of good young players, including Chris Brunt, Glenn Whelan, Madjid Bougherra, Marcus Tudgay – who have all been sold for profit.

"We were beginning to reduce the debt and I put my hand in my pockets several times to help the manager strengthen the team.

"But some supporters could not forgive me for sacking Paul Sturrock and after I had left, the debt increased and the team went down again."

Sheffield Wednesday statement in full

The Board of Sheffield Wednesday PLC ("the Board") can confirm that an agreement has been reached to sell Sheffield Wednesday Football Club Limited ("the Club") to UK Football Investments, LLC ("UKFI").

This agreement is conditional on approval of the Company's shareholders and is part of a wider restructuring package, the completion of which will see the Club emerge from its recent financial troubles debt free.

- UK Football Investments, LLC is owned by the trustees of the Milan Mandaric 2008 Revocable Trust.

- The highlights of the agreement are:

- UKFI will pay the Company GBP 1 to acquire 100% of the Club

- UKFI have entered into an agreement with the Co-Operative Bank which will allow for the Club to move forward free of any residual debt

- The current and former Directors other than David Allen who own loan notes in the Company have all agreed to waive a significant majority of the value of their debts, with any repayment of the remaining sum only taking place upon the Club gaining promotion to the Premier League

- David Allen will receive an initial payment on completion of the acquisition along with a further payment upon the Club gaining promotion to the Premier League

- Upon completion of the deal, Kenneth Cooke, Robert Grierson and Geoffrey Hulley shall resign as directors of both the Company and the Club

- The new Board of the Club will consist of Milan Mandaric, who shall serve as Chairman and directors Howard Wilkinson and Nick Parker

Shareholders will be asked to approve the sale of the Club to UKFI at an Extraordinary General Meeting, which will take place on 14th December 2010. Further details of this meeting will be sent to shareholders directly.

The Board can confirm that it has already received irrevocable undertakings from 43.6% of the company's shareholders to vote in favour of the deal.

After reaching this important milestone UKFI, has given the Board written assurances they will pay the outstanding balance of 300,000 that is the subject of a winding up order, brought by HMRC and due to be heard in the High Court on December 1, 2010.

In his dealings with the Board Mr Milan Mandaric has also made clear his intention to invest in all aspects of the Club, and that his aim is to see Sheffield Wednesday once again be a force in English football.

Commenting on the agreement, Sheffield Wednesday Chairman Howard Wilkinson said: "I believe this to be one of the most important days in the recent history of our great club. Our trials and tribulations have been well documented, but I can now see a brighter future for Sheffield Wednesday.

"Our Club has been on the brink of administration, and if this were to happen then so many people around our Club would have suffered. We do have one final hurdle to cross, and that is for shareholders to approve the sale at the upcoming EGM.

"I will always be grateful to Milan Mandaric for showing the determination to save Sheffield Wednesday. We have been able to spend some time in recent days speaking about football and what needs to be done here. I look forward to working with Milan in building a strong Club in which we can all be proud.

"I would also like to put on record, my thanks and appreciation to the whole staff and supporters of Sheffield Wednesday who have stuck with us through thick and thin. In particular I would like to thank our Chief Executive Nick Parker, who has worked night and day to save Sheffield Wednesday from administration.

"In addition, I would like to put on record my sincere thanks to the departing and former directors of the Club who are also the loan note holders. They have served the Club loyally for many years without remuneration and have agreed to suffer a significant financial loss in order to allow this transaction to proceed. Their support throughout the many years of their service should not be doubted.

"On behalf of the Board I fully recommend this offer to shareholders, and to our supporters I again call on you to get behind our team."

Speaking on reaching this agreement, Milan Mandaric said: "Sheffield Wednesday is one of the most famous names in football. I have been able to speak to a lot of people in and around the Club in recent weeks, and their passion for Sheffield Wednesday has helped inspire me to get to this point.