Australian Rugby / RA

[stillmissit]

Rebels set to sue Rugby Australia as civil war erupts, Rugby Victoria President barred from summit

Civil war is about to erupt in Australian rugby, with the Melbourne Rebels to sue Rugby Australia as the embattled Super Rugby franchise fights…

www.theroar.com.au

Seems like an act of madness to me. Why wait until you are bankrupt? The Rebels must go if this goes ahead and threatens the whole of Aus rugby.

 

[Rob42]

I am getting very confident that the horror corner is past. RA is doing as well as it can with the money in hand and Schmidt and Kiss are outstanding coaches and people. IF the Tahs and Reds can continue as they have started and the Brumbies will always be strong, that should leave the basket case Rebels and the Force who should improve under Cron.
24 could be a good year compared to the last 10 years.

Yes, I like the new administration, but even with making good decisions around coaching, etc, a $22 million debt from one team could derail everything.

 

[Braveheart81]

It's hard to see how Rugby Australia's response can be anything other than trying to kill MRRU Limited now.

I am not a lawyer but it would seem Rugby Australia's best action is to delay anything relating to the Rebels action against them while waiting for the 60 day stay of execution of the Rebels to end and for the ATO to lose patience and push for liquidation. In my experience as soon as the ATO stops being willing to wait, things move quickly.

 

[John S]

It's hard to see how Rugby Australia's response can be anything other than trying to kill MRRU Limited now.

I am not a lawyer but it would seem Rugby Australia's best action is to delay anything relating to the Rebels action against them while waiting for the 60 day stay of execution of the Rebels to end and for the ATO to lose patience and push for liquidation. In my experience as soon as the ATO stops being willing to wait, things move quickly.

In my experience (a while ago now) working in the insolvency industry - when the ATO is a major creditor it definitely doesn't take long to head to wind up stage - they wait for the Administration/trade-on period to end and usually vote to wind up, and collect as much of their debt as possible. They are generally more keen to get their Super and PAYGW debts before GST etc.

 

[KevinO]

Seems like an act of madness to me. Why wait until you are bankrupt? The Rebels must go if this goes ahead and threatens the whole of Aus rugby.

I think it was a case of RA not playing ball, the Rebels board working on this believing in good faith that RA is going to pay what ever they owe and RA waiting on PE which fell through.

 

[KevinO]

So I just read that the 80 million deal with PEP has a 12% interest rate, who on signed off on that? Surely they should have managed a better rate then that.

Someone correct me if I am wrong, that would mean on the current 50 million drawn that RA are paying 760K in interest per month.

 

[Steve_Grey]

So I just read that the 80 million deal with PEP has a 12% interest rate, who on signed off on that? Surely they should have managed a better rate then that.

I think it works out at 15% - an extra 3% hair on top.

Not sure what the previous loan rate was - RA used 40m of the drawdown to pay that off, so they have one consolidated loan now.

Annual interest running cost will be around 7.5m - more than it costs to run a Super Rugby Team for a year - rises more they drawdown of course.

If they default, then PEP get the Wallabies name I believe.

 

[hoggy]

So come next year when the Rebels fade into the sunset, the RA can point to pretty much zero % growth over the last 20 years, and a bank loan of some $40/50 million give or take a few as no one seems to actually know.

Ironic really that the only tangible growth they can point to is due to pissing of a billionaire so much that he decided to fund a team to spite them.

 

[Steve_Grey]

While RA have the drawdown - it is not clear what the repayment requirements are - theyy might be able to roll the interest up.

They would have been better off going to the Capital Bond Markets and issue a coupon paying bond with payments secured against future receipts - that way any default would be understood with no loss of IP.

 

[Braveheart81]

So I just read that the 80 million deal with PEP has a 12% interest rate, who on signed off on that? Surely they should have managed a better rate then that.

It's debt secured by some IP. I'm not surprised the rate is that high.

 

[Jimmy_Crouch]

Ironic really that the only tangible growth they can point to is due to pissing of a billionaire so much that he decided to fund a team to spite them.

Happy to put dogsh*t in a bag and set it on fire on Gina's, Big Clive's, MCB's doorstep if that works

 

[Jimmy_Crouch]

While RA have the drawdown - it is not clear what the repayment requirements are - theyy might be able to roll the interest up.

They would have been better off going to the Capital Bond Markets and issue a coupon paying bond with payments secured against future receipts - that way any default would be understood with no loss of IP.

I'd think Matt Hanning would have a decent idea on what would be best.

 

[Braveheart81]

They would have been better off going to the Capital Bond Markets and issue a coupon paying bond with payments secured against future receipts - that way any default would be understood with no loss of IP.

What rate would you need to be paid to make that an attractive investment?

 

[Steve_Grey]

What rate would you need to be paid to make that an attractive investment?

Finger in the air - secured against future receipts - 10% - but you would probably need to issue over 150m in debt obligation to attract investors.

I have seen riskier grade bonds, secured against less, pay similar - 2 to 3 year maturity.

 

[Braveheart81]

Finger in the air - secured against future receipts - 10% - but you would probably need to issue over 150m in debt obligation to attract investors.

I have seen riskier grade bonds, secured against less, pay similar - 2 to 3 year maturity.

Then you've got to price in the cost of issuing bonds, as you've noted there needs to be enough scale to make it worthwhile and you also issue them all at once.

They have a facility now that they can draw down on when required so they're not paying interest on the full $80m now.

If there was a substantially better option out there I think they would have taken it.

 

[Steve_Grey]

Then you've got to price in the cost of issuing bonds, as you've noted there needs to be enough scale to make it worthwhile and you also issue them all at once.

They have a facility now that they can draw down on when required so they're not paying interest on the full $80m now.

If there was a substantially better option out there I think they would have taken it.

"If there was a substantially better option out there I think they would have taken it."

Assumptions can lead to the mother of all fcuk-ups - I'll leave it there as this is not a financial engineering forum.

Fingers crossed....

 

[Dan54]

Right, so this is all just a theory by you.. and nothing to actually support the claim that "the reason Aus got WC in 27 was to make sure they got some money to stay afloat"

Yep all only theory from taking what I read, was in no way meant to be downplaying RA's bid. I thought everything we posted on here was from what we read. All I know is I was always confident Aus would get it well before it was named, and I had read the article that made me believe it. Same as I was very confident that US would get 31 before bids were finalised.
Similar to haven read that the Rebels were in the shit, it was a theory I got from reading articles in the paper.

 

[Mick The Munch]

At some point PEP are going to get cold feet on the loan and ask for it back - will see the threat to the loan

 

[Rob42]

Triston Reilly, back with the Tahs this year after playing NRL last year, reinforces the point that our squad players need more footy:

“I had one my favourite years, even though the main team at Tigers only won a few games. But I played a lot of games, I played 20-odd games,” Reilly said.

“In previous years, I was playing a few games at the Tahs and a few games at Randwick. The amount of footy wasn’t enough. But I had a big year last year, just playing consistent footy week-in, week-out."

 

[Omar Comin']

Is Twiggy the only billionaire in Australia with an interest in rugby? According to Forbes there's 141 in the country, and I'd assume hundreds more in the '50-99% of the way there' category. There's got to be at least a few that are lifelong, passionate rugby people. But if there are, why do none of them step up and solve this? C'mon rugby loving billionaire's, how bout a large (but still quite small by your standards) interest free loan to your future best mates at RA to get the game out of this mess? Or if you really want to extend your legacy you could consider a larger donation to set up the sport up for the next 100+ years. In return a whole bunch of stuff can be named after you if you like. Your name can live on for centuries as the man or woman who saved Australian rugby and set it on the path to greatness!