The Wasps is due to fully repay its debt to bondholders by 2022, but it seems that the club is currently struggling to generate enough money to pay it off.
According to Sean Farnell, a partner at Burgis and Bullock: “There’s no way at current activity/income levels that the club can repay the bondholders out of operating cashflow. In fact they have negative annual cash flows so the situation is actually getting worse annually.”
The Wasps owns the Ricoh Arena: selling it would more than pay off the debt, but the Wasps has ruled the option out.
This follows a report in February showing that the Wasps had a £1.1 million loss from the last 6 months of 2016.
To raise £35 million, the Wasps launched a scheme in April 2015 offering bonds of £2000 each to investors.
Bondholders have been paid 6.5% every 6 months and the bonds are expected to be repaid by 2022.
Paul Carvell, managing partner at Stuart Fletcher and Barrett, said: “There is no way the company is generating the money to repay that. My only conclusion is that they are going to have to re-finance, unless there’s a massive turnaround.
“All I know is that it’s not generating enough money at the moment to pay that off from its own trade.”
In response, the Wasps has said: “As we have always said since launching the retail bond in May 2015, one of our options would be to re-finance the bond, which we are entitled to do any time between May 2019 and May 2022.
“We would like to underline that selling the Ricoh Arena has never been part of our plan. We have said from the outset that Wasps’ long-term future is at the Ricoh Arena and this remains true.”