Welsh Rugby Union enters into £55m debt refinancing agreement amid domestic turmoil
The troubled Welsh Rugby Union has entered into a £55m debt refinancing agreement as the governing body eyes stadium developments amid domestic turmoil.
The WRU has borrowed from Goldman Sachs and HSBC in order to pay off existing debts to NatWest and various government bodies in a refinancing package that will play out over a three-and-a-half year period before it negotiates a longer-term agreement.
The announcement came as WRU chief executive Abi Tierney and chairman Richard Collier-Keywood faced questions from the Welsh Affairs Committee in Parliament. Collier-Keywood could face a vote of no confidence at a potential extraordinary general meeting.
The WRU is facing scrutiny over its decision to cut the number of regions playing in the multi-national United Rugby Championship from four to three, while this week reportedly entering into an exclusivity period with the owners of Swansea-based Ospreys for a takeover of Cardiff. Such a move could see the country’s most successful pro region axed.
Welsh Rugby Union refinancing
Collier-Keywood told the committee that he was speaking from memory when it came to the numbers, but said that the core terms are shared equally between HSBC and Goldman Sachs.
“We have a £50m total debt from them with a £5m specific for projects on the side,” he added.
“The terms are better by about one percentage point, [on terms of] SONIA [Sterling Overnight Index Average] plus 2.75.
“We were originally intending to refinance out for 10-20 years. But because of some of the turmoil we need to sort out first we didn’t think going to the US paper markets at this point in time for 10 or 20 year debt would be appropriate. We’ve done the refinancing for three-and-a-half years, which we see as a bridge.”
The Welsh Rugby Union is facing a significant sum of lost revenue across the coming months with thousands of tickets still remaining for their three Six Nations matches, against France, Italy and Scotland.