The Welsh Rugby Union has refinanced £18m of emergency Covid response lending it provided for the four regions in a deal involving the Welsh Government.
In October 2020 the union negotiated an £18m UK Government established Coronavirus Large Business Interruption Loans Scheme (CLBILS) funding package, via NatWest Bank, alongside £2m from World Cup - which took total funding to the financially hard hit regions during the pandemic to £20m.
The finance, which was split almost equally between the four regions of the Scarlets (£5.5m,) Dragons (£4.5m) Ospreys (£5m) and Cardiff (£5m), had to refinanced after a three year period. The interest payments made to date were covered by the WRU as it sought to negotiate more favourable refinacing terms with the Welsh Government.
Inline with long-term repayable Covid response funding from the UK Government to rugby in England, the WRU has now refinanced the £18m NatWest CLBILS funding with the Welsh Government, with the capital paid in instalments up until 2040. A new long-term repayment schedule has also been agreed with World Rugby.
The interest on the CLBILS loans was less than 3%. It is understood the interest from the Welsh Government is more favourable.
The Welsh Government, through UK Government funding, has a long-term funding mechanism, financial transactions capital. This is where it can provide finance, and it has given significant investment to the Development Bank of Wales in this regard, where there is an interest payment return.
Chief executive of the WRU, Steve 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.
“We must also extend our thanks to NatWest for both their initial support in providing the CLBILS loan and the pragmatism they have shown in helping facilitate the refinance.”
Deputy Minister for Arts and Sport, Dawn Bowden, said; "Following the challenges of the previous two years the Welsh Government has stepped in to provide the WRU with a long-term £18m repayable loan to help it refinance a shorter-term coronavirus loan it took out during the pandemic."
The WRU secured a £13.5m Welsh Government grant in March 2021, which was split equally between the four Welsh regions and itself. A further £500,000 was accessed via the Spectator Sports Survival Fund in January 2022.
Chief executive of Ospreys Rugby, Nick Garcia, said: “This financial support will help to secure the ongoing success of rugby and the regional game in Wales.”
"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.”
Chair of the Scarlets, Simon Muderack, said: “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.”
Chair of the Dragons, which the WRU have the majority equity stake in, David Buttress, 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.”
Chair of Cardiff Rugby, 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.”
