Wasps statement: The latest delay to stadium bondholders repayment

Wasps’ worrying delay in repaying their bondholders has taken another twist following the latest statement from the club admitting that they still haven’t been able to agree to final terms for the refinancing and redemption of the bonds. The Gallagher Premiership club should have made the repayment in May only for Wasps to announce that the repayment date was pushed back until the end of June to allow additional time to finalise terms with HSBC to refinance that bond debt.

A statement at the time quoted Wasps CEO Stephen Vaughan: “We thank bondholders for their continued support and look forward to updating them further in due course.” However, a deal still hasn’t been struck regarding refinancing, adding to worries about the current financial position of the club.

It was shortly after acquiring a 250-year lease on the Coventry Building Society Arena, which was then known as the Ricoh Arena, that Wasps launched a bond scheme in April 2015. Bondholders invested at least £2,000 each and most of the £35million raised was used to pay off previous debts, including a £13.4m loan from Coventry City Council and £10m of loans from Wasps owner Derek Richardson.

However, the Arena business has struggled financially and the latest set of filed accounts from November 2021 showed losses of about £18.5m over the past two years and net liabilities of £54.7m. 

Aside from leaving bondholders frustrated that they haven’t been able to get their investment back, Wasps encountered heavy criticism last month after it emerged they had asked the West Midlands Combined Authority (WMCA) for £13m of public money as the financial strain builds on their stadium business.

The previous update from Wasps on June 30 claimed that the bond refinancing was subject to final due diligence and documentation and the expectation was that the deal would be complete by August 12. However, that deadline is now set to pass without a deal being struck, according to the latest update from the financially troubled club. 

Here is the Wasps statement in full as published by the Coventry Telegraph: “Wasps Finance plc provides an update on the refinancing and redemption of the issuer’s £35,000,000 6.50 per cent secured bonds due May 13, 2022 (ISIN: XS1221940510, Common Code: 122194051) (the “Bonds”).

“Further to the announcement on June 30, 2022, the issuer has not yet been able to agree on final terms for refinancing and as such will not complete the refinancing and redemption of the bonds within the previously proposed timeframe.

“In parallel with the refinancing discussions with HSBC UK Bank plc as senior debt provider referred in previous announcements, the issuer has, in recent months, been pursuing different refinancing options in addition to making progress with a number of key initiatives to increase both the profitability and asset value of the group.

“The board, therefore, considers the appropriate course of action is to seek an extension of the bonds to allow time for the completion of the refinancing. The issuer is now working on the proposed bond terms to be amended and will formally launch a consent solicitation process in August once the proposed terms have been finalised.

“In the meantime, the issuer will continue to seek to have the bonds reinstated on the London Stock Exchange. This may need the approval of the consent solicitation prior to being able to do so and the issuer is in discussions with the UK Listing Authority in relation to the exact steps that will be required for re-listing and subsequent re-admission to the London Stock Exchange.

“Bondholders will continue to receive interest for the period from May 13, 2022, on a half-yearly basis until the date of redemption.”