Sheffield Wednesday will be handed a 15-point deduction for next season in League One if a deal with their new preferred bidder goes through.

Administrators have begun an exclusive period of negotiation with American private equity company Arise Capital Partners.

However, Arise’s offer would not meet the EFL’s requirement to repay creditors 25p in the pound, which would mean the Owls starting life back in League One with a significant handicap.

Dejphon Chansiri, their main creditor, is understood to have loaned the club £60m in more than a decade as owner, and must be paid back £15m of that if the Owls are to avoid a points loss.