The former Pompey chairman's offer has been accepted by the club's administrator Trevor Birch, as the south coast side look to rebuild following their relegation to League OnePortsmouth have taken a step towards exiting administration after administrators accepted a bid from the club's former chairman Balram Chainrai.
The Hong Kong-based businessman made an offer to buy the club through his company Portpin last month, following the south coast side's relegation to League One.
Administrator Trevor Birch has now presented creditors with a CVA (company voluntary agreement) proposal which would see them paid 2p out of every pound which they are owed.
"We have written to all of the club's creditors to inform them of the CVA proposals. We believe these [proposals] are likely to give the best possible deal," Birch told reporters.
Those creditors will now have the opportunity to vote on the new agreement on 25 June and, if accepted, Chainrai could be reinstated as the club's official owner.
Chainrai said: "If approved, the proposal will ensure the club's survival and give the club an opportunity to steady itself and get back on its feet after a troubled few years.
"I would urge all creditors entitled to vote on the CVA to follow the recommendation of the club's administrators and vote in favour of the CVA, so as to help save the club and get it back to the position that it should be in."
Despite Birch's recommendation to accept the offer, the Pompey Supporters' Trust (PST) have signalled their intention to launch a rival bid for the club.
A statement on their website read: "Early next week Antony Fanshawe of Begbies Traynor, acting on behalf of PST, will have formal discussions with Trevor Birch with a view to presenting a bid within 7 days.
"We are confident that this counter-offer will deliver a better return to creditors than the offer made by Portpin."