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Administration possible if Leicester don't get £13million cash injection

Dan Cole - PA

A planned £13 million pound cash injection is set to save Leicester Tigers from potentially going into administration.

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The club revealed this week that directors Tom Scott and Peter Tom have committed to an investment which “could raise up to £13m for the club”, a move which was needed as Tigers admit that recent events have seen their financial “situation worsen significantly”.

Scott is set to invest £10 million, while Tom is set to invest a further £3 million, both by way of a share buyout. Ordinary shareholders will vote on the share subscription on March 3rd.

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Despite lifting the Gallagher Premiership trophy last season and receiving a £1 million windfall payment after the RFU bought Steve Borthwick and Kevin Sinfield out of their contracts, the club finds itself on perilously close to calling in administrators.

The stark reality of their financial situation was detailed in an address to shareholders by CEO Andrea Pinchen. The demise of Wasps and Worcester is one of the main sources of grief for the midland’s giant’s coffers.

“As a consequence of both of those clubs being expelled from the Premiership, Leicester Tigers lost two important home matches in the current season and the associated match day revenues. This loss of revenue has contributed to a significant deterioration in the Company’s financial position since the publication of its 2022 annual report and a working capital shortfall, together with a breach of overdraft limits in place with the Company’s bankers, is expected in the first quarter of 2023.”

If it were not for the £13 million investment, the club admit that they “would have to find urgent alternative funding. There is no guarantee that such alternative funding will be available or on terms deemed to be acceptable either to the Directors or to the Company’s creditors. Given the Company’s current and anticipated working capital requirements, the Directors believe that should the Resolutions not be passed they may have no choice but to appoint administrators.”

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In the case of Scott, the deal would likely see Scott become a majority shareholder in Leicester Tigers with over 71 per cent of ordinary shares. Despite Tigers not being publically listed, a waiver is needed so that Scott is not obliged to make an offer for all of the outstanding shares.

“Although the Ordinary Shares are not publicly traded or listed, as a public limited company the Takeover Code applies to the Company. As a result, without a waiver from the Takeover Panel and the approval of the Independent Shareholders, the Initial Subscription would give rise to a requirement for Tom Scott to make a mandatory offer for all of the outstanding shares in the Company. The Takeover Panel has agreed with the Company to grant the Rule 9 Waiver, subject to the passing of the Waiver Resolution at the General Meeting by the Independent Shareholders on a poll.”

It’s a worrying time for the club and English rugby writ large. If the biggest rugby club in the land is hitting the wall, what does that say about the state of the game more broadly?

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3 Comments
r
robespierre 880 days ago

Hopefully they'll fold.

C
Chris 877 days ago

Oh look. You're a bellend.

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Upnorth-taniwha 39 minutes ago
New Zealanders may not understand, but in France Test rugby is the 'B movie'

So with all that's been said, France sending a b team, top 14 so strong, we support ab’s, they support top 14 and WC and six nations. It is what it is, but do you think that the results of this tour have matched the outcry? Like the first test against a so called b side? Yes we won, just. The second test was better, but against a lesser team apparently. And the third test we will experiment, to a degree. But we are still not thrashing them. One would expect if the teams they are sending are so bad, then why aren't we holding them scoreless and why aren't we putting 50-60 points on them every week? We put all our emphasis on international rugby, yet the show isn't what one would think it would be considering all the facts. I don't know, but I was really expecting the ABS to come out in the first test and show France how pissed off they were that they had sent a mediocre test team. Send them home thrashed and with their Tails between there legs, but I don't know. I think they would go home confident that even if they put the b side in, they can compete against a power house AB team. Not good for us, more so for them. As we all know, the mental side of international rugby is huge. Players confidence can set there path for their careers. So I think it was a perfect chance to absolutely dent the confidence of these up and comers, so when they faced us again in the future, they wouldnt be so keen! And if the ABs had really smashed this team and any other team that done the same, then it would be a message to all international sides. That if you do so, you do so at your own risk and at the expense of the growth of your players going forwards. I get what everyone is saying in regards to all the other stuff. Yes we have a lot to work on. But firstly we need to win, and win big. Otherwise these complaints of b sides, look rather silly. Yes we are 2 nil up. The second test against a much weeker side was better-ish. But C'mon, if they want to send b sides, we should treat them like that, and really be smashing them. Confidence in any player, can be changed for the entirety of their careers. Maybe if we did this, they would realise the effects and send stronger teams. But I don't think that so far this series, any player would feel like they wouldn't want another go at the ABs and can face up to them. Just a thought

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