Wasps risk having stadium seized over administration

Wasps’ home could be seized by Coventry City Council if they became the latest Premiership club to go into administration.

The council confirmed the club faced forfeiting ownership of the Coventry Building Society Arena were they to enter into “some kind of insolvency regime.”

Wasps have barely a week to avoid such a plight after filing a second notice of intention to appoint administrators.

It is not clear whether the latter would be sufficient to activate a clause in their leasehold agreement with the council although joining Worcester Warriors in entering administration appears certain to do so.

Coventry City Council said in a statement: “It is true the lease may give rise to a right to forfeit if the tenant enters into some kind of insolvency regime but there are restrictions on that.

“We continue to monitor the situation and will act in the best interests of Coventry City Council and the arena asset.

“We are closely monitoring the situation and we are engaging with advisors and some potentially interested parties if requested as part of the process, in line with our role and responsibilities as freeholder of the asset.”

The Daily Telegraph has been told the council has no intention of exercising the clause unless Wasps were sold to someone planning not to continue to use the stadium for sporting purposes.

The note of intention to appoint administrators announced by Wasps this week afford them a 10-day grace period protecting them against action from creditors, including HM Revenue & Customs, and bondholders owed £35 million.

The latter helped bankroll the club’s 2014 purchase of a 250-year lease on the Coventry Building Society Arena from the council and was secured against its value.

Any seizure of it, therefore, would have huge implications for those bondholders.

Wasps sent shockwaves through English rugby upon filing their first notice to appoint an administrator after being threatened by HMRC with a winding-up petition over a £2 million tax bill.

After filing the second notice, a spokesperson said: “Since filing the original notice of intention on Sep 21, a number of additional potential investors and funders have come forward. Discussions are now at a relatively advanced stage, and we remain hopeful of securing a deal that will allow the group, and the entities that sit within it, to move forward.

“While the financial circumstances facing the group are extremely challenging, we remain optimistic about a positive outcome and will keep our players, staff, supporters, partners, bond holders and suppliers updated as this process moves forward.”

The most recent set of accounts for Wasps Holdings, covering the year ending June 2021, showed it recorded a loss of £18.5 million over a two-year period and had net current liabilities of £54.7 million.