Welsh Rugby Union renegotiates terms of £20m loan for regions
- Published
Steve Phillips succeeded Martyn Phillips as WRU chief executive in 2020
The Welsh Rugby Union (WRU) has renegotiated the terms of a £20m loan to Wales' four regional teams, who will now repay it over 20 years instead of three.
The Coronavirus Large Business Interruption Loan Scheme (CLBILS) loan was negotiated by the WRU for the four professional sides in 2020.
The original five-year repayment period was viewed as unfavourable.
Under the new terms, the regions will pay back the loan at £1m per year.
The WRU originally took an £18m loan from NatWest bank to protect the Welsh professional game following the significant losses incurred during the Covid-19 pandemic.
A further £2m was borrowed from global governing body World Rugby, bringing the total loan to the regions to £20m.
The loan was divided with £5.5m going to Scarlets, £5m to Cardiff, £5m to Ospreys and £4.5m to Dragons.
The Welsh Government has stepped in to assume responsibility as the body loaning the money, with the timescale extended to 20 years.
The arrangement allows the WRU to repay the loan to NatWest, having covered the initial repayment instalments.
Speaking in February, WRU chief executive Steve Phillips said the loan saved the regions from bankruptcy and denied an allegation of a "master and slave relationship" between the union and its four professional teams, who have been frustrated they have not received more money for the use of their Wales players.
In the statement announcing the fresh arrangement Phillips said: "The CLBILS arrangement was the right thing to do at the right time and ensured our professional game survived the pandemic.
"The pandemic had a catastrophic impact on the sports sector and it was vital at the time that we moved quickly to secure funding.
"We have been hugely grateful to Welsh government for their support throughout the pandemic and their significant help in creating much more manageable repayment terms, as we seek parity for our regional sides with their peers."
Welsh government deputy minister for arts and sport Dawn Bowden said: "This financial support will help to secure the ongoing success of rugby and the regional game in Wales."
Welsh regional rugby chiefs also welcomed the financial support.
Ospreys chief executive Nick Garcia said: "There is no doubt that support from Welsh government has helped the survival of the professional game in Wales throughout the pandemic. We now have the opportunity to build for a new era."
Cardiff chair Alun Jones said: "We are hugely grateful to Welsh government for their support and to all involved in renegotiating the terms of the loan, the next step is to move beyond survival to success both on and off the pitch."
Scarlets chair Simon Muderack added: "We survived the global pandemic but there is still a lot of hard work ahead for the professional game in Wales and we know we must work together to create the conditions in which we can both survive and be successful,"
David Buttress, chair of WRU-owned Dragons, said: "The repayment terms on this funding are now greatly improved as we now look to building a brighter future for regional rugby in Wales."
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