Wasps file to appoint administrator to ‘protect the clubs interests’
Wasps have filed notice that they intend to appoint an administrator in an effort to “protect the clubs interests”.
Under RFU rules, if a club enters administration or intends to appoint an administrator during the season, it will be relegated.
A clause however may protect the club, as it says the RFU will waive or amend sanctions over an insolvency event that the club was unable to prevent. The pandemic is listed as reason that the RFU will take into consideration.
However, Wasps Holdings Limited said the move “does not mean the business is in administration” instead it provides a “crucial period of grace” to continue with negotiations to secure the future of the club.
The Coventry-based club has failed to repay a £35m debt after it launched a plan in 2014 to purchase Coventry Building Society Arena.
The money was raised through a first-of-its-kind bond scheme. Costing £2,000 each, the bonds offered 6.5% interest every six months over their seven year period.
Investors should have been repaid in May but on that date a statement was issued informing there had been a delay as the bond was in the process of being refinanced.
The club recently said it had made progress and talks with a lender were “at an advanced stage”. It said it had “received an offer which would see the bonds fully redeemed on completion of this refinancing”.
The move to file notice was down to “the impending threat of action from HMRC” which was preparing a winding-up petition over unpaid tax.
In a statement, the RFU said it is “in dialogue with Wasps, we will work with them to understand the current action, their sustainability plans and what the next steps will be.”
Wasps, twice European champions in 2004 and 2007, have started the Premiership season with defeats against Gloucester and Bristol.
The club’s visit to Bath on Friday (23rd September) will go ahead as planned.
In it’s statement Wasps confirmed “the day-to-day operations of the business are unaffected, and we will continue to support our players, staff, supporters, bond holders and suppliers, and keep them fully updated during what we appreciate will be an unsettling time”.