Monday, October 3, 2022

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England rugby in shock after Wasps join Worcester in fight for survival

England club rugby is in shock after it was revealed Wasps have joined Worcester in the fight for survival amid the threat from the administration.

Just hours after Worcester owners were given a 5pm deadline on Monday to prove they are capable of pulling Sixways out of crisis or facing a suspension from all competition, Wasps has filed a notice of their intention to appoint an administrator to the High Court.

The Warriors’ financial struggles have played out in public for the past two months, but the sudden escalation of turmoil at CBS Arena sent shock waves through on a dismal day for the Premiership.

Both clubs are being sued for unpaid tax and have been issued winding up orders by HMRC, raising the very real prospect that the top flight could be reduced from 13 to 11 clubs within weeks.

Wasps are also struggling to repay the £35m bond which was raised to help fund their move from High Wycombe to Coventry in 2014.

Although they are confident they will secure the necessary funds to prevent administration, failure to do so could result in automatic relegation from the Premiership.

However, the Rugby Football Union has the discretion to reduce or waive any sanction should the insolvency be deemed beyond the control of the club, including in circumstances such as a pandemic.

“Due to the imminent threat of action from HMRC, Wasps Holdings Limited has taken the difficult decision to file a notice of intent to appoint directors in order to protect its interests,” a statement from Wasps Holdings Limited read.

“This measure does not mean that the company is in administration but provides a crucial grace period to continue negotiations with a number of interested parties in order to secure the long-term future of the group.

“These negotiations have been going on for some time, are at an advanced stage and we hope to reach an agreement.

“In the meantime, the day-to-day operations of the business are unaffected and we will continue to support our players, staff, supporters, bondholders and suppliers. We will keep them fully informed during what we appreciate to be a troubling time.

Worcester, meanwhile, has until the evening of September 26 to provide the Rugby Football Union with proof that he has the required insurance, is able to pay the payroll and has a “ credible plan to move the club forward”.

They are saddled with debts totaling more than £25million, including at least £6million in unpaid taxes, amid growing anger felt at owners Colin Goldring and Jason Whittingham, who have been charged with having stripped the club’s assets.

Moreover, they must prove by midday Thursday that they can put on Saturday’s Premiership game against Newcastle after last Sunday’s first home appearance of the season only came about thanks to the efforts of the staff, including many have not received their August salaries.

If Worcester fails to provide the assurances over funding and insurance sought by the RFU, they have been told the suspension could result in the complete withdrawal from all leagues.

It is the most dramatic development in the saga to date as patience runs out with owners Goldring and Whittingham, who have yet to sell the club to a new buyer despite repeated claims that a deal is imminent.

While there is no doubt Wasps’ ability to complete their game against Bath on Friday night, the prospect of one of England’s most successful clubs going bankrupt will alarm the Premiership as other teams may also be in trouble.

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