Reading Football Club is allegedly facing a sale roadblock due to more than £55 million debts owed by owner Dai Yongge.

Documents seen by The Guardian newspaper allegedly reveal Mr Yongge's undisclosed debt to a Chinese state-backed bank has hindered his attempts to sell the club.

The publication reports a loan from Haitong International Securities, secured against the club's stadium, caused the collapse of a £30 million takeover by Rob Couhig last month.

The investment bank has the right to claim Reading's stadium if the debt is not repaid upon sale of the club, according to the documents.

Reading announced on Monday they had entered "exclusive negotiations" with another buyer, but the unresolved stadium issue remains a major hurdle.

If the loan remains unpaid after the club is sold, ownership of the stadium will pass to Haitong.

The English Football League (EFL) has not been informed of the new prospective buyer's identity, with scepticism surrounding the likelihood of a sale.

Haitong, currently merging with Guotai Junan Securities to form China's biggest bank, has been accused of effectively blocking last month's intended sale by obtaining a stop notice in the British Virgin Islands (BVI) where the stadium is registered.

This stop notice prevented the stadium's transfer to Mr Couhig's company, Redwood Holdings.

The EFL, like Mr Couhig, was unaware of Mr Yongge's debt to Haitong, despite being asked to approve the sale.

A source with knowledge of the process said: "It’s not that Dai won’t sell, but he can’t sell.

"He put the stadium up as collateral against a £50m loan, and the bank want their money back.

"And no one is going to buy Reading without the stadium.

"The loan was due to be repaid two years ago and Haitong have been going through the Hong Kong courts since then, but with Dai close to selling they are pushing harder now.

"Given their links to the Chinese government they should not be underestimated."

Haitong provided a loan to Prestige Fortune Asia, listing Mr Yongge as its sole shareholder, of around £44 million in 2018.

The loan matured in July 2022 but no repayments have been made, causing the debt to exceed £55 million with added interest.

Negotiations over repayments began in January 2023, with Mr Yongge proposing to use assets including the stadium and surrounding land to repay the debt.

The Hong Kong courts were involved and in February this year, a stop notice regarding the stadium was granted by the BVI court office.

The EFL and Haitong International have all declined to comment on the situation.

A spokesman for Reading Football Club told The Chronicle although the 'stop notice' was factual, a potential sale is allegedly 'progressing'.