CHRONICLE of EVENTS
2nd At 4pm, the Otago Board announces they will delay for one week the filing of liquidation pending the outcome of a possible recovery package.
9th The Otago Board announce they have postponed liquidation for another week as negotiations continue for a way out, which is put at “50/50”.
2013 RUGBY almanac “Chronicle of Events” p.360.
But by March 15 a solution had been hammered out!
“The Otago Rugby has been saved by a deal that sees the Dunedin City Council writing off a $400,000 unpaid bill, major creditor BNZ converting debt to sponsorship, and a $500,000 NZRFU loan.
A deal was hammered out during a meeting between the council and ORFU “change manager” Jeremy Curragh. The meeting started at 3pm, and finished after 10pm.
The ORFU went into last night’s meeting with $2.35 million in debts, and facing a $700,000 loss for this year.
The council approved the recovery package by eight votes five, with two absences.
A new arrangement with ORFU’s largest creditor,BNZ, was central to the recovery package.The bank began talks with the ORFU and NZRFU before Christmas, BNZ spokeswoman Erica Lloyd told NBR.It has now reached an “alternative commercial arrangement” with the NZRFU, freeing the province of its bank debt load.
Ms Lloyd would not comment on reports that BNZ (already a Super Rugby supporter) would have an expanded sponsorship role under the arrangement.
She did offer that it was better than the alternative – BNZ losing all of its money in an ORFU liquidation.
Other key elements:
NZRU will loan ORFU $500,000
The loan is subject to conditions including the resignation of the entire ORFU board, and an NZFU observer attending every meeting of the new board
Dunedin City Council, and its events company Dunedin Venue Management (DVML), which manages the Forsyth Barr Stadium, will write off around $480,000 in unpaid bills
In return, NZRU has pledged to hold a series of high-profile games at the council-owned stadium, including a North-South match in June, and All Black tests in 2013 and 2014
DVML will sign a three-year venue deal with ORFU for the ITM Cup
DVML will take over management of ORFU sponsorship
NZRU, ORFU and the players association to work together to cut player contracting spend by $290,000
At a press conference after the meeting, Dunedin Mayor Dave Cull reiterated his earlier comments that the survival of the ORFU was “neither here nor here.”
The Mayor said the key issue was the $4 million annual loss faced by ratepayers if games were not secured for the council-owned Forsyth Barr stadium.
In a statement, NZRU chief executive Steve Tew said, “We will want to have a new board in place that has the right blend of skills and experience to ensure this union never again finds itself in the predicament it currently faces. And we will be insisting on ongoing scrutiny of its business plans and accounts.”