Welsh regions agree £20m loan split
- 1041
The Welsh Rugby Union (WRU) has completed the agreements with the four Regions to onward lend the £20m loan Coronavirus Large Business Interruption Loan Scheme (CLBILS) from NatWest Cymru.
The WRU’s appointed banker granted final approval for CLBILS funding earlier in October and the agreements with the Regions mean this money can now be onward lent. The money has been sourced with the direct aim of sustaining Wales’ four regional sides – Cardiff Blues, Dragons, Ospreys and Scarlets – for the 2020/21 season.
It is needed because of the negative impact the ongoing pandemic has had on the ability of each business to generate revenue in the usual way. The allocation of the CLBILS funds has been determined by each region, working together in the PRB and agreed collectively, what they each needed to bridge the challenges of this current season.
The £20m loan agreement is between the WRU and NatWest Cymru, with the money onward lent to each individual region with the terms of the agreements between the WRU and the regions reflecting the terms of the original loan.
Cardiff Blues are set to receive £5.0m, the Dragons £4.5m, the Ospreys £5.0m and the Scarlets £5.5m.
“We are extremely grateful to NatWest Cymru for supporting professional rugby in Wales with this hugely significant contribution to our sustainability for the year ahead,” said PRB chair Amanda Blanc.
“PRB members have engaged in open discussions about the allocation of funds according to the individual and different needs of each entity.
“This is precisely what the PRB is here to do, to manage, facilitate and enable professional rugby in Wales and to sustain all five professional entities in accordance to the needs of each at a given time.
“For a region to accept and vote through a decision which gives themselves less funding than a neighbour, but for justifiable and entirely explicable reasons, shows the PRB working at its finest.”
NatWest Cymru was officially appointed as banker to the WRU in March 2019, in a deal which provided a c.£40m funding package at the time, including revolving credit facilities to support earnings enhancing capital expenditure and ongoing working capital needs.
“The global pandemic has created unprecedented economic challenges to many sectors, none more so than events and hospitality,” said Stuart Allison, who is a Director with NatWest Cymru.
“In 2019 we structured a financing arrangement designed to facilitate growth and revenue diversification.
“In response to the immediate challenges of the pandemic we revisited that arrangement and crafted a structure that will provide additional funding and flexibility to further support the Welsh Rugby Union and, in turn, professional rugby in Wales with this loan.
“As the game’s governing body in Wales, the WRU is working to ensure it is in the strongest position possible to build stability and success in both the professional and the community game.
“We are confident that these funds will be utilised to maximum effect to help to mitigate the negative impact of the pandemic and are pleased to be able to offer our support.”
CLBILS is a government scheme designed to facilitate access to finance for medium-sized and larger businesses affected by the coronavirus outbreak. Terms give the lender a government-backed partial guarantee (80%) against the outstanding balance of the facility, but the borrower remains fully liable for the debt.
“We have been engaged in healthy discussions with NatWest Cymru and ended up with a sensible solution which we are all very pleased about and very grateful to NatWest Cymru for,” said WRU CEO Steve Phillips.
“It has been the PRB’s role to establish a consensus amongst our regional sides concerning the allocation of the money.
“The easiest thing to do would have been to split £20m four ways, but it is to everyone’s credit that we have come up with a much more appropriate solution than that.
“The four regions are all at different stages and their needs differ accordingly.
“So, the PRB has done what it is set up to do and brokered a solution that suits all four entities. We have ended up with fair and sensible allocation rather than equal for the sake of being able to say ‘equal’ and it is a solution for which I think all parties should be commended.”
