Rugby Australia’s debts blow out to almost $89 million after draw-down of PEP facility


Rugby Australia’s debts ballooned by $17 million to almost $89 million during 2023, with the code’s governing body drawing down $50 million of its $80 million facility with Pacific Equity Partners just a month after the financial lifeline was put in place last November.

RA’s 2023 annual report also sheds further light on the terms of the $80 million PEP facility, including that it carries an interest rate of “6.25% above Australian Bank Bill Swap Reference Rate”.

That swap reference rate is currently 4.37%, suggesting RA is paying PEP an interest rate of 10.62%.

That equates to an annual interest bill of more than $5 million for RA on the $50 million drawn down thus far.

Other terms of the debt facility detailed in the annual report include that the PEP deal “requires Rugby Australia Ltd to maintain the sum of the cash and cash equivalents above $2.5 million” and that the $80 million facility is “repayable on 24 November 2028”. It also states:

“As of 31 December 2023, a Security deed was entered into and all present and after acquired property, interests and rights and proceeds in respect of which Rugby Australia Ltd has at any time sufficient rights to grant a security interest has been used as collateral against the (PEP) Loan Note.”

In addition to the $50 million draw-down on the PEP facility, RA had other current and non-current liabilities of $38.9 million on its balance sheet for a total of $88.9 million, up from $72 million a year earlier.

While RA is expected to continue drawing down on the PEP Facility throughout 2024 and into 2025, RA chief executive Phil Waugh is hopeful that cash windfalls expected from the 2025 British & Irish Lions tour to Australia and the 2027 men’s Rugby World Cup will be more than enough to pay it back.

According to a leaked document obtained by The Roar, PEP expects those two events will generate a combined $225 million in cash flow for RA.

PEP’s take on that RA deal is that it “underwrote two major events which generate $200m+ of high confidence/controlled cashflows.”

(Photo by Matt King/Getty Images)

The document refers to the revenue generated from the British & Irish Lions tour as coming from “shared broadcast and sponsorship revenue” and “ticketing/match day profit retained by RA”.

From the RWC, it will come from “direct contractual payment from World Rugby” with “minimal costs incurred by RA”.

PEP also highlights that the $225 million revenue forecast is more than four times the coverage of the $50 million RA has already drawn down on the $80 million facility.

Meanwhile, the RA annual report also notes under the heading “Contingent liabilities” the claim made by the Melbourne Rebels board which, while not quantified, was listed as being for more than $8 million in the report released last week by the Rebels’ administrator Stephen Longley.

“As at the date of signing this Report, MRRU (Melbourne Rebels Rugby Union) remains under voluntary administration and the Group is aware of potential claims by the former directors of MRRU against Rugby AU and its Board of Directors in relation to: (a) an alleged shortfall in funding provided by Rugby AU to MRRU for the period 1 January 2020 to November 2023; and (b) PAYG liabilities incurred by MRRU whilst Melbourne Rebels players were representing the Wallabies which the former MRRU directors allege should have been paid by Rugby AU. Based on limited evidence made available to Rugby AU in relation to these potential claims as at the date of signing this Report, Rugby AU is unable to ascertain the merits of such claims.”

It also confirms that the participation agreement for the Rebels to play in Super Rugby expired on 31 December 2023 after not being extended prior to the Rebels lapsing into administration in January 2024.

“As a result, the licence to field a team representing Victoria in the Super Rugby Pacific competition remains with Rugby AU. From 1 February 2024, Rugby AU became the employer of all Melbourne Rebels players by providing notice under their standard player contract. MRRU ceased operating the Melbourne Rebels business effective 14 February 2024 with Rugby AU assuming management of the business operations going forward.”

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The Rebels board has argued they should have the club’s licence reinstated because it was lost under “unconscionable circumstances.”

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