SA Rugby liquidates financially troubled Southern Kings
CAPE TOWN – The Eastern Province Rugby Union and SA Rugby have decided to liquidate the financially troubles Southern Kings.
In a statement released on Saturday afternoon, SA Rugby said the decision was taken with the Pro14 franchise R55m in the red and with no income expected for the remainder of 2020.
The Eastern Cape-based franchise have become the victims of the coronavirus pandemic that has affected sport around the globe.
“The hard fact is that the Kings are insolvent, with significant debts and zero assets and it would have been reckless of the board to continue to trade,” said Kings chairman Andre Rademan.
“Its continuation would have required loans from the EPRU and loans additional to the R45m that the company already owes to SA Rugby.
“In the absence of any rugby in 2020, and without any guarantees as to income prospects for 2021, it would have been financially irresponsible of the shareholders to have pumped in further funding.”
SA Rugby president Mark Alexander added that extending additional credit to an insolvent entity at a time when the rugby industry was required to make a saving of R1.2bn to stay afloat this year was not an option.
“The history of the Kings has been one of expectation and anticipation but unfortunately the parallel story of commercial failure couldn't be wished away any longer,” said Alexander.
“The debts the organisation has accumulated over the years are considerable and in the current environment the only certainty was that they would grow.
“The membership of SA Rugby has invested heavily in the Kings project but it is now time for a re-examination of what is the appropriate and sustainable pathway for rugby in the Eastern Province.”
IOL Sport