The overall facilities afforded to the WRU by Barclays Bank PLC now currently stand at £55.2 million. This includes a new £10.0m revolving facility which allows the WRU, given the cyclical nature of its business, to pay off significant sums when it is generating high income and then have the freedom to call upon increased support if so required.
WRU Audio: Listen to an interview with WRU Group Finance Director Steve Phillips
This new revolving facility has allowed the Welsh Rugby Union to make a multi-million pound repayment to reduce its debt due to Barclays Bank PLC in the year ended 31 May 2008. At the year end date the WRU debt was £45m.
With the introduction of the revolving facility and by making this repayment the WRU can now reduce its interest charges due to the bank by a six figure sum.
The new arrangement confirms the bank’s confidence in the ability of the WRU to manage its borrowing.
The loan was originally taken out by the union to help fund the building and development of the Millennium Stadium which celebrates its tenth anniversary next year.
The turnover of the union is projected to be close to £50 million for the year ended 31 May 2008.
The Group Chief Executive of the Welsh Rugby Union, Roger Lewis, said: “This is a major step forward for us and offers us considerable opportunities in taking our business planning onto a new level.
“Any organisation with ambitions to grow and prosper must have the confidence and the ability to manage its finances properly, effectively and responsibly.
“Now the WRU has a new level of financial freedom and the announcement of this deal sends out all the right messages to our stakeholders, potential partners for the future and the rugby fans of Wales.
“I have overseen major changes in the senior management team, internal structuring and commercial strategy of the WRU and Barclays are basically telling us we are making the right decisions. I know Steve in particular has shown great determination and endeavour to reconfigure our internal structures to create the measures and balances we were then able to take into our talks with Barclays.
“I am now excited by the prospect of being able to utilise this new financial standing we enjoy for the benefit of Welsh rugby as a whole.”
WRU Group Finance Director, Steve Phillips, added: “The dialogue with Barclays has been extremely focused and they challenged us on all our financial plans and strategies.
“This arrangement basically means they are restoring to us a level of trust which allows us to properly manage our business and make the hard decisions involving millions of pounds.
“It is incumbent on us to manage that trust with the due control it deserves which means using this arrangement with the kind of commercial creativity which will help us prosper.
“What it all boils down to is that Barclays are giving us a greater degree of freedom in how we manage our business and allows us to focus on the repayment profile of this substantial loan. I am delighted that Barclays have afforded us this opportunity and would wish to thank them for their efforts over the last few months.”
Greer Hooper, Relationship Director with Barclays Commercial Bank said: “Barclays is committed to using our industry expertise and specialists to support the WRU. By really understanding the business, Barclays has been able to provide innovative solutions and financial packages beneficial to both parties.
“The facilities of the Welsh Rugby Union have been restructured on a more commercial footing which reflects the confidence which we have in the business and the management team. Barclays are delighted to continue our support for the Welsh Rugby Union and wish them continued success on and off the field of rugby.”
John Union, Corporate Director Barclays Commercial Bank, said: “Our relationship and support for the WRU goes back a very long time and I am absolutely delighted that the hard work put in by both parties over the last twelve months has resulted in an agreement which provides them with more flexibility to manage their business in the future.”
