Wasps provide update on bonds that generated £35m to purchase Coventry Building Society Arena

Bondholders who raised millions of pounds needed for Wasps to buy the Coventry Building Society Arena will have to wait a little while longer to get their money back. When the group that owns the Premiership rugby club set about its ambitious plan in 2014 to purchase the stadium, then called the Ricoh Arena, the money was raised by launching a first-of-its-kind bond scheme.

Costing £2,000 each, the bonds offered 6.5 per cent interest every six months over their seven-year period. £35 million was raised, which enabled the Wasps Group to secure the arena from operating company ACL – jointly owned by the Alan Edward Higgs Charity and Coventry City Council back in 2014.

Coventry City Football Club, whom the stadium was built for following their departure from Highfield Road in 2005, remained as tenants but with different landlords. Money generated from the bonds also went towards establishing Wasps in the Midlands after its migration north from its London roots.

READ MORE:Wasps Rugby officially opens its new training ground

That seven-year bond period has elapsed with the maturity date for the bonds arriving on Friday, May 13. Instead of them being repaid, a statement was issued to the London Stock Exchange by Wasps Finance PLC on Friday entitled ‘Notice of Refinancing and Delay to Repayment’, informing that the bonds are in the process of being refinanced with HSBC.

Below is the statement in full…

Wasps Finance plc (the “Issuer”) provides an update regarding the refinancing of the Issuer’s £35,000,000 6.50 per cent. Secured Bonds due 13 May 2022 (ISIN: XS1221940510, Common Code: 122194051) (the “Bonds”).

Together with the support of Wasps Holdings Limited and Arena Coventry Limited (together, the “Guarantors”), the Issuer has agreed, subject to final due diligence and documentation, the terms for the refinancing of the Secured Bonds, with a lending group including HSBC UK Bank plc (“HSBC”) as senior debt provider.

The Bonds’ final Maturity Date is set to occur on 13 May 2022 and in connection with the proposed refinancing, the redemption of the Bonds at their nominal amount will be delayed pending completion of the refinancing. U.S. Bank Trustees Limited (the “Trustee”) has also been notified of this delay and the Issuer expects to complete the refinancing on or before 30 June 2022.

Wasps Finance plc will continue to meet its obligations under the Bonds to pay interest as it falls due, including the upcoming payment on 13 May 2022, until the Bonds are redeemed on completion of the refinancing.

Stephen Vaughan, Chief Executive Officer of Wasps Holdings Limited, commented: “We are pleased to have agreed the terms with HSBC UK. While we complete the final terms of the refinancing, the full redemption of the Bonds will be delayed. We thank bondholders for their continued support and look forward to updating them further in due course.”

The Issuer will provide further updates as appropriate.

The latest update follows the approval of amendments to covenants on the bonds back in November 2020 following a dramatic fall in revenue, chiefly due to the global pandemic. The Wasps Group, which includes the Premiership rugby club, stadium operators Arena Coventry and events company IEC Experience, saw full-year revenue as of June 30, 2020, decrease year-on-year to £22.2million, compared to £34.5m for the previous year to June 30, 2019.

Sky Blues back at the Ricoh, Stephen Vaughan, Wasps Group Chief Executive and Dave Boddy, Chief Executive of Coventry City at the press conference announcing the deal bringing Coventry back to the Ricoh Arena
Sky Blues back at the Ricoh, Stephen Vaughan, Wasps Group Chief Executive and Dave Boddy, Chief Executive of Coventry City at the press conference announcing the deal bringing Coventry back to the Ricoh Arena (now the Coventry Building Society Arena)

Since moving to Coventry, it has been no secret that the Wasps Group has struggled commercially. The group has recorded yearly losses ranging between £3.7m and £11.1m. The only year when profit was recorded was in June 2019, when every Premiership club benefited from a huge slice of investment in the league by CVC.

The latest accounts for the year-end June 2021 reported a loss of £7.4m. However, in the last 12 to 18 months, the business has received a number of boosts as it recovers from the impact of the global pandemic that saw many members of staff made redundant.

After two years spent away from the arena, Coventry City Football Club agreed to a 10-year deal for their return in March 2021 ahead of the 2021/22 season. Two months later, a new stadium-naming partner was secured with Coventry Building Society coming on board.

Numerous funding bids were also successful, securing millions of pounds to improve facilities and allow the arena to host Commonwealth Games events later this year. The rugby operation has also shown little signs of being under financial pressure, as £4 million was invested into creating a state-of-the-art training facility in Henley-in-Arden that is among the best in English rugby.

It ended a five-year ‘temporary’ stay at Broadstreet RFC, where the club had based its day-to-day playing operation since 2016. While some big-name players are leaving their squad this summer, including Wales international Thomas Young and arguably their most iconic star of the ‘Coventry era’, Jimmy Gopperth, Wasps have started their recruitment strongly ahead of the 2022/23 campaign.

Saracens’ World Cup-winning tighthead Vincent Koch and Munster’s former Ireland international prop John Ryan are joining as is South African Burger Odendaal from the Lions. On the pitch, Wasps are currently ninth in the 13-team league and reached the last four of the European Challenge Cup before missing out on the final following a semi-final loss to Lyon on Saturday.

Their final home game of the season, and penultimate game of their Gallagher Premiership campaign, comes on Friday night against Sale Sharks, where a win would give head coach Lee Blackett’s side a strong chance of achieving Heineken Champions Cup qualification.

Source link

Check Also

We’re Adding to This Cybersecurity Play

After you receive this alert, we will buy 465 shares of the First Trust Nasdaq …

Leave a Reply




Get our latest downloads and information first.
Complete the form below to subscribe to our weekly newsletter.