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Melbourne Rebels to continue fight for survival after winning rescue vote
By Carla Jaeger and Sarah Danckert
Directors for the Melbourne Rebels have secured a major victory against Rugby Australia after creditors voted to support a rescue deal to save the debt-laden Super Rugby club.
The proposal was put forward by a private equity-backed consortium led by business heavyweight Leigh Clifford and the Melbourne Rebels’ directors.
The Melbourne Rebels will continue their bid for survival after creditors backed a rescue deal. Credit: Rugby Australia
Consortium spokesperson Georgia Widdup welcomed Friday’s successful vote and thanked administrator PwC for ensuring employees received their full entitlements.
“The Melbourne Rebels are an integral part of the sporting fabric of the state and play a critical role in making Melbourne the sporting capital of the world. Today’s decision ensures the women’s and men’s club can progress plans for our financially sustainable future,” Widdup said.
“There is still a lot of work to do, but with the vote out of the way and a lot of community and government goodwill behind the club, we can finally get excited about what the future holds, and we urge Rugby Australia to support rugby in Victoria.”
Two sources, who attended the 2pm meeting on Friday but declined to be named for professional reasons, said the administrator had the deciding vote after the creditor vote was tied on the consortium deal.
The sources added the Australian Taxation Office had voted against the proposal.
The meeting occurred just hours before the team was scheduled to host the Blues in a Super Rugby match at AAMI Park on Friday night.
The first-stage distributions to employees and unrelated unsecured creditors are equivalent to $4.28 million. The directors of the Rebels have also agreed to fund the administrators $741,000 for their work in running the club.
The consortium is also planning to raise a further $15 million to $25 million to propel the club into 2025 and beyond.
Under the deal, employees will receive a return of 100¢ in the dollar, and unsecured creditors will receive between 15¢ and 30¢ in the dollar. The range of the payout will depend on whether the directors are successful in their planned legal claim against Rugby Australia over alleged underfunding of the club.
The Rebels’ consortium must jump two hurdles before it can retain control of the company: Rugby Australia handing back the licence for the Super Rugby competition, and the Australian Taxation Office releasing the directors from their personal liability over the club’s $11.5 million in tax debts.
The group will now have 30 days to negotiate with the sport’s peak body and the Tax Office. If unsuccessful, the consortium will then have 60 days – or a date approved by the administrators – to commence legal proceedings to wrangle back the licence.
If they’re still unable to claim back the licence, or be released from their director penalty notice, the deal will collapse, and the consortium will no longer have any claim to the company.
More to come
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