Scarlets' £2.6m loan extension wins council backing

Parc y Scarlets is the major sporting venue in Carmarthenshire

Scarlets have been granted a further 15-year extension by Carmarthenshire County Council (CCC) to repay a £2.6m loan taken out from the local authority in 2007.

The council's approval means should Scarlets go on to repay the loan by 2038, it will have taken 31 years to do so.

In July 2024, CCC cabinet members recommended the new arrangement should go ahead and it was accepted at a full meeting.

The west Wales rugby region was originally given the loan 17 years ago as they prepared to move from Stradey Park to Parc y Scarlets.

The initial £2.4m loan - since risen to £2.6m - was due for final payment in April 2023.

But amid ongoing financial issues, Scarlets wanted a three-year period in which no repayments would be made, followed by 12 more years in which the loan would be repaid.

Scarlets' new repayment plan will start in April 2026 and end 12 years later.

The land on which Scarlets' stadium sits is owned by the authority, but the venue and surrounding land was leased to the club for 150 years.

Parc y Scarlets opened in November 2008; the stadium and related facilities cost £25.4m to build and £18.3m was provided in differing forms by Carmarthenshire council.

In October 2013, CCC agreed to restructure the original £2.4m loan. Earlier in the same year an overspill car park close to the stadium, which was leased to Scarlets, was sold for £850,000. Scarlets received about £600,000 following the sale, despite the land being owned by the council.

Originally the Scarlets were paying 7% interest on that loan, but a revamped deal saw them paying 4% interest with the potential for it to increase.

Due to be repaid by 2023, the new deal could have meant CCC earning about £800,000 less than it would have done, had the original terms of the loan been kept.

Council officials recommended councillors should agree to the terms of the loan again being renegotiated on this basis:

• The term of the loan be extended for 15 years from 1 April 2023, on a repayment basis, with a three-year deferral of payments. The value being £2.616m.

• Repayment of the loan principal commences on the 1 April 2026 on a equal instalments basis, with the value being £218,000 per annum.

• Interest continues to be chargeable and is charged at a rate of 2.2% above bank base rate.

The officials added: "The Scarlets are restructuring their cost base with the anticipation of them becoming more sustainable longer term and has structured their proposed repayment plan on the basis of their current financial pressures."

You can watch the council's discussion and contributions from Scarlets chiefs here.