Saying no to a ‘disaster’ for
THE starkest warning yet has been issued over what rejecting the Welsh Rugby Union takeover of the Dragons would mean for rugby at Rodney Parade.
Newport RFC shareholders will meet on Tuesday, May 9, to vote on the proposal, which would see the Union assuming full control of the Dragons and buying the ground.
It will require a 75 per cent vote in favour for the takeover to go ahead and there has been vociferous opposition to the plan from concerned Black & Ambers fans.
Now Dragons board member Alex James has outlined in the clearest possible terms just what will happen if there is a no vote.
“It would be an absolute disaster for both Gwent regional rugby and Newport RFC,” he said.
“Automatically, the Dragons business wouldn’t be able to trade. The receivers would be called in the next day.
“The Dragons would immediately have to go into administration and, if they fold, the WRU funding would cease and associated loans and debts would be called in.
“This could lead to Newport RFC being in a position where they are unable to pay their debts, including playing staff and creditors.
“At that point, the secured loans against the ground would be called in.
“The bank would then appoint a receiver, since they have first charge on the ground, and the insolvency process would then necessitate the sale of the ground.
“This will lead to no rugby being played at Rodney Parade and it becoming a building site with no surplus for Newport RFC.”
James warns there would be nothing left for the Black & Ambers to start afresh elsewhere if the ground which they currently own was sold for property development.
“The shareholders may think this is a Dragons problem and Newport RFC could go it alone,” he said.
“But the debts on the Newport balance sheet are greater than the value of the asset.
“And if a forced sale happens, nothing will be left for Newport RFC to go it alone.
“The land is only worth what somebody is willing to pay for it.
“People have put figures out there of £5m or £6m, but is land in Newport £600,000 an acre? I don’t think so.
“The Union deal, at a bit more than £3.5m, is a fair reflection of where we are as a going concern.
“If it goes to a no vote, the liquidators will get involved and there will be people out of work.”
James, who is a director of the Dragons, Newport RFC and Rodney Parade Ltd, continued: “People have got to take this for what it is.
“We are where we are. We have nowhere to go.
“We have got to a situation now where the business is running out of cash.
“The facilities are currently in need of a massive amount of investment. It needs so much doing to it, while the pitch problems have been well documented.
“There is no more money coming from the existing directors and the current financial projections don’t look good. So where do we turn? There is no white knight on a charger coming to bail us out.
“It is our legal duty to look at the best option for the companies, otherwise administration is not too far away with hundreds of jobs on the line.
“It’s in the best interests of protecting rugby at the ground to go with the WRU option, unless someone comes out of the woodwork with at least £5m within the next couple of weeks or so.”