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Wasps owner hits back at 'ill-informed' rumours about club

Wasps fans at CBS Arena /PA

Speculation continues to mount regarding the future of Wasps Rugby this weekend as their financial outlook looks increasingly grim.

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Wasps have now failed to meet three deadlines on bond repayments, having raised £35 million in bonds on the London Stock Exchange back in 2015.  An initial May repayment day was missed and they subsequently missed a second pushed-back date in June.

On Friday they reportedly missed their latest deadline for the bond repayment, much of which is owed to fans of the club who availed of the bonds in 2015. They will continue to pay interest on the bonds, which is 6.5 per cent per annum.

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Irish owner Derek Richardson has said that the club are not going into administration, despite rumours doing the rounds on the internet.

“Contrary to some ill-informed speculation, we are not in administration and we are not going to be,” Richardson told The Times yesterday. “We made a statement on the bond repayment on May 13, we’ve been very transparent with the market and the bond-holders. We’ve paid the interest on the bond and will continue to when it is due.”

Defaulting on bondholders can have significant financial implications for the company that issues the bond which could in turn leave financial institutions reluctant to lend them money.

Wasps are currently in the midst of trying to refinance the debt but any refinancing would hang on the valuation of the Coventry Building Society Arena. One source told RugbyPass that Wasps were looking at a valuation of between £50m to £60m for the arena and hotel. The problem for Wasps is that they in effect have one realistic buyer for a sports stadium in Coventry, that being Coventry City FC. Another third party could theoretically buy Wasps, the stadium and their debt, although this seems unlikely.

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With three deadlines now elapsed, it doesn’t appear that Wasps have reached an agreement with HSBC, despite appearing to suggest that they had in a May statement.

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The problem for bondholders is that the bonds are not protected by the Financial Services Compensation Scheme (the FSCS).” As a result, according to Wasps documentation “neither the FSCS nor anyone else will pay compensation to you upon the failure of the Issuer, the Guarantors or the Group as a whole.”

Put simply, the fate of the bondholders is more or less entirely reliant on Wasps’ financial viability. If the club went under, they would be looking at a significant haircut after preferred creditors were repaid.

On the playing front, money has been saved. Significant saving on salaries have been made at the end of last season, with 11 squad members heading to the exit – including three All Blacks. Malakai Fekitoa, Vaea Fifita, Jimmy Gopperth, Thomas Young, Cameron Anderson, Michael Le Bourgeois, James Gaskell, Rob Miller, Pieter Scholtz, Jeff Toomaga-Allen and Marcus Watson have all left the club.

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Against this eight players have signed ahead of the new season, with Springbok prop Vincent Koch the most high-profile hire.

With relegation not returning to the Gallagher Premiership until season 2024/25, if Wasps are looking save money on player salaries at the cost of league position, now is as good a time as any.

Axing of salary overheads would also certainly help when it comes to servicing the £2,275,000 owed in interest to bondholders per annum.

Despite speculation and unlike in association football where clubs are deducted points for going into administration, RugbyPass understands that Premiership Rugby Ltd would not look to punish Wasps further. There is a precedent for Gallagher Premiership sides going under, with Richmond and more recently London Welsh falling to that fate.

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J
JW 5 hours ago
Does South Africa have a future in European competition?

I rated Lowe well enough to be an AB. Remember we were picking the likes of George Bridge above such players so theres no disputing a lot of bad decisions have been made by those last two coaches. Does a team like the ABs need a finicky winger who you have to adapt and change a lot of your style with to get benefit from? No, not really. But he still would have been a basic improvement on players like even Savea at the tail of his career, Bridge, and could even have converted into the answer of replacing Beauden at the back. Instead we persisted with NMS, Naholo, Havili, Reece, all players we would have cared even less about losing and all because Rieko had Lowe's number 11 jersey nailed down.


He was of course only 23 when he decided to leave, it was back in the beggining of the period they had started retaining players (from 2018 onwards I think, they came out saying theyre going to be more aggressive at some point). So he might, all of them, only just missed out.


The main point that Ed made is that situations like Lowe's, Aki's, JGP's, aren't going to happen in future. That's a bit of a "NZ" only problem, because those players need to reach such a high standard to be chosen by the All Blacks, were as a country like Ireland wants them a lot earlier like that. This is basically the 'ready in 3 years' concept Ireland relied on, versus the '5 years and they've left' concept' were that player is now ready to be chosen by the All Blacks (given a contract to play Super, ala SBW, and hopefully Manu).


The 'mercenary' thing that will take longer to expire, and which I was referring to, is the grandparents rule. The new kids coming through now aren't going to have as many gp born overseas, so the amount of players that can leave with a prospect of International rugby offer are going to drop dramatically at some point. All these kiwi fellas playing for a PI, is going to stop sadly.


The new era problem that will replace those old concerns is now French and Japanese clubs (doing the same as NRL teams have done for decades by) picking kids out of school. The problem here is not so much a national identity one, than it is a farm system where 9 in 10 players are left with nothing. A stunted education and no support in a foreign country (well they'll get kicked out of those countries were they don't in Australia).


It's the same sort of situation were NZ would be the big guy, but there weren't many downsides with it. The only one I can think was brought up but a poster on this site, I can't recall who it was, but he seemed to know a lot of kids coming from the Islands weren't really given the capability to fly back home during school xms holidays etc. That is probably something that should be fixed by the union. Otherwise getting someone like Fakatava over here for his last year of school definitely results in NZ being able to pick the cherries off the top but it also allows that player to develop and be able to represent Tonga and under age and possibly even later in his career. Where as a kid being taken from NZ is arguably going to be worse off in every respect other than perhaps money. Not going to develop as a person, not going to develop as a player as much, so I have a lotof sympathy for NZs case that I don't include them in that group but I certainly see where you're coming from and it encourages other countries to think they can do the same while not realising they're making a much worse experience/situation.

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