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Southern Kings go into voluntary liquidation

Howard Mnisi, Southern Kings

The future of Southern Kings, the struggling Guinness PRO14 franchise, has been plunged into further turmoil after the board of SA Rugby placed the insolvent company into voluntary liquidation to secure the longer-term financial future of rugby in Eastern Province.

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The Kings shareholders, the Eastern Province Rugby Union (EPRU) and SA Rugby, took the decision in the face of an accumulated deficit of R55m, and with zero income in prospect for the remainder of 2020.

“The hard fact is that the Kings are insolvent, with significant debts and zero assets and it would have been reckless of the board to continue to trade,” said board chairman Andre Rademan.

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“Its continuation would have required loans from the EPRU and loans additional to the R45m that the company already owes to SA Rugby. In the absence of any rugby in 2020, and without any guarantees as to income prospects for 2021, it would have been financially irresponsible of the shareholders to have pumped in further funding.”

Mark Alexander, SA Rugby president, added that extending additional credit to an insolvent entity at a time when the rugby industry is required to make a saving of R1.2bn to stay afloat this year was not an option.

The history of the Kings has been one of expectation and anticipation but unfortunately the parallel story of commercial failure couldn’t be wished away any longer,” he said. “The debts the organisation has accumulated over the years are considerable and in the current environment, the only certainty was that they would grow.

“The membership of SA Rugby has invested heavily in the Kings project but it is now time for a re-examination of what is the appropriate and sustainable pathway for rugby in the Eastern Province.”

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SA Rugby resumed ownership of a 74 per cent shareholding in the PRO14 Kings in June following the failure of the previous owners – the Greatest Rugby Company in the Whole Wide World (GRC) – to honour contractual commitments in relation to its purchase of the shares.

The GRC had acquired the shareholding in January 2019 but was unable to deliver on the promised turnaround strategy. The Kings’ struggle to build a sustainable business model had twice seen it fall into management control by SA Rugby.

Rademan said: “It’s time for the Eastern Province rugby community to consolidate and take stock. We have managed to put in firm foundations at the EPRU, after historic financial troubles, and we can look to build rugby in the region from that platform.

“It gives us the opportunity to re-focus on creating a business model that is sustainable and right for rugby in the Eastern Province. This is very difficult news to give to people and the board would not have wanted it this way. But sport is a business and we are in unprecedented times. There was no other option.”

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T
TT 25 minutes ago
'No, it’s not, that’s the truth' - Andy Farrell rubbishes Ireland subplot

ABs by 4……


IF

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7 Go to comments
J
JW 31 minutes ago
How can Scott Robertson revive the All Blacks’ playmaking ‘triple threat’?

HAHA don't ask me that! You tell me, if McMillian was the AB coach would he be selecting Dmac over Mo'unga!?!


Look, Dmac is clearly first choice. Razor said BB was a selection "just for this game", Dmac was always leading the two big ones. They rotated BB and Mounga the same way in 22.


Firstly, I'm a fan of BB when he's not gun shy. Do I think he's a first five? Of course not, he can hardly pass the ball 5 meters. Do I think he's likely to play again after being concussed? No, end of discussion.


Do I hate Mo'unga? No, of course not. He was the only reason we got within cooee of SA, him finding his footing at International level was their main reason for success. Do I think that resulted in him being a game orchestra or having played well in black the years prior to that? Of course not. Maybe you were just on the end of the better AB performances fran, outside of those games I'd suggest he wasn't as influential as you think. He has a good kicking game for sure, but it's certainly not up there with Carter or even some current 10s, and it's certainly not much better than DMac's (understand you own opinion still won't say that) despite him having a lot more development and experience.


He would obviously get a great opportunity from Razor if he came back, and DMac would possibly find he can be a good fullback or bench player under Razors guidance, but if you're wrong and Dmac actually performed better than Richie running the show, then he'll having Damien as his 10 come RWC time.


TLDR, JWH is a Cantab, Richie is one of my favourite players, we just think you've got the wrong context in this article and I think you're way off the mark on Richies strengths.

44 Go to comments
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