Parent company Wasps Holdings Limited say it is likely that they will enter into administration in the coming days
Wasps are set to go into administration and have withdrawn from their Gallagher Premiership match against Exeter Chiefs on Saturday.
The Coventry-based club have been pushed to the brink of financial ruin by a debt pile that includes an unpaid tax bill owed to HM Revenue & Customs.
Wasps also face having to repay a £35m bond which had helped finance the club’s relocation to Coventry in 2014.
Parent company Wasps Holdings Limited has previously filed two notices of intention to appoint FRP Advisory, the restructuring firm, as administrators in the past month.
They gave the club 10 days of breathing space from creditors as it sought to find a way through its financial troubles.
Wasps have been suspended from the Gallagher Premiership and will need to reapply for the suspension to be lifted, which will only happen if they are able to demonstrate the means and commitment to pay rugby creditors.
If the former Premiership and European champions do go into administration it could mean automatic relegation, unless they can prove to the Rugby Football Union that it was a ‘no-fault insolvency event’.
This is defined by the regulations as circumstances ‘beyond the control and without the fault or negligence of the affected club’ and the club was unable to prevent with reasonable diligence. For example, the Covid pandemic or a natural disaster.
Former Wasps chief spearheads bid for stricken Premiership club
Sky News has learnt that David Armstrong, who stepped down as Wasps’ chief executive in 2017, is working with Terminum Capital on a bid to buy the club.
Sky News revealed on Sunday that David Armstrong, a former Wasps chief executive, was working with investment firm Terminum Capital on a bid to buy the club and its stadium.
Exhibitions group NEC later lodged a bid for the Coventry Building Society Arena, the club’s stadium which it shares with Coventry City FC, though Sky News city editor Mark Kleinman understood that its interest did not extend to the club itself.
Wasps Holdings released a lengthy statement on Wednesday outlining the situation as news of the club withdrawing from their fixture at Exeter was confirmed.
“Since filing a notice of intention to appoint administrators on September 21, we have been working tirelessly to secure the long-term future for Wasps Holdings Limited, and all of the organisations and clubs that sit within the group,” it said.
“Negotiations to secure deals that will allow the men’s and women’s rugby teams, netball team and the arena and associated business to move forward are ongoing. However, it has become clear that there is likely to be insufficient time to find a solvent solution for the companies within the group, and it is therefore likely that they will enter into administration in the coming days with a view to concluding deals shortly thereafter.
“While the companies within the group all represent strong and viable businesses, the reality is that they have insufficient cash at this time to continue to fund operations until these complex negotiations have concluded. We have therefore been asking potential funders and investors to provide bridging finance to provide enough time for a solvent solution to be found. Regrettably, this has not been possible to date, although we will continue to pursue this until the very last opportunity.
The Coventry-based club have been pushed to the brink of financial ruin by a debt pile which includes an unpaid tax bill owed to HM Revenue & Customs
“In light of the current situation, we have therefore taken the decision to withdraw the Wasps men’s team from this Saturday’s league fixture against Exeter Chiefs. This was an extremely difficult decision to make, and we recognise that this will not only impact on our players, staff and supporters, but also Exeter Chiefs and the wider rugby community. However, we strongly believe it is the right course of action when, at this time, we are unable to meet our regulatory requirements in the absence of fully concluded deal negotiations.
“We understand that this news will be disappointing and concerning for everyone involved. Our immediate focus will be on ensuring that all of our players and the staff of Wasps and the arena are fully updated and given the support they need.
“While these are challenging times, we remain confident that new owners will be found that will allow the clubs and businesses within the Group to move forward. We will not be making any further statement at this time.”
Wasps was founded in 1867 in Hampstead, London but its journey away from London and the South East to Coventry has not proved successful despite twice finishing Premiership runners-up in that time.
They moved 80 miles north from their last home in High Wycombe in late 2014.
Worcester suspended for season and will be relegated to Championship
Wasps’ financial issues follow that of Worcester Warriors, who had their relegation to the Championship confirmed by the RFU, a day after the company holding player contracts went into liquidation, leaving the club player-less.
Worcester players ‘let down by owners’ says Lawrence
England centre Ollie Lawrence has called for Worcester co-owners Colin Goldring and Jason Whittingham to “take accountability” for the situation that has unfolded.
Administrators Begbies Traynor are still seeking a buyer for WRFC Trading Ltd and are said to be talking to two consortiums, but the club have now been suspended for the remainder of the Premiership season and relegated due to insolvency.
WRFC Players Ltd was liquidated in the High Court and the winding-up petition concerned an unpaid tax bill of approximately £6m.
The club also fear that Premiership Rugby (PRL) may next buy the Warriors’ P-share – at £9.8m – as one of England’s elite 13 clubs, which would cut access to central funding.
How Wasps’ troubles impact Coventry City
Coventry City play their home games at Coventry Building Society Arena, which they rent from Wasps
Coventry City’s future at their stadium is back under a cloud of uncertainty as Premiership rugby club Wasps head for administration.
City rent the Coventry Building Society Arena from Wasps, who agreed a 250-year lease with Coventry City Council worth £20m in 2014.
The Sky Blues understand that their agreement would also fall into the hands of administrators if that eventuality is confirmed later this week.
But the stadium’s freehold still belongs to the council and it is understood there is a clause that states the lease can be declared null and void in the case of insolvency.
That eventuality would therefore put Coventry’s future at the ground back into the hands of the council, whom they have had considerable conflict with in the past over their right to play at the former Ricoh Arena.
As it stands the club are continuing as normal. They have a good relationship with Wasps Group and have confirmed to Sky Sports News they are in constant contact with the rugby club’s owners.
“Coventry City FC are aware of statement from Wasps Group today and remain in contact with them regarding the current situation,” a statement said.
Talks are ongoing with various investors trying to buy all or parts of the Wasps Group, but it was confirmed on Wednesday that these “complex negotiations” are unlikely to be completed in time to prevent administration.
It means that the status of where Coventry City play their home games is back on the agenda as they sit bottom of the Championship with just one win from their opening 10 games.
