Rugby Southland future on the line
Rugby Southland could be insolvent and Rugby Park mothballed if a solution to the outdoor stadium's woes is not found.
Rugby Southland chairman Paul Menzies has confirmed the organisation would be insolvent if it was not repaid a $600,000 debt owed to it by the Southland Outdoor Stadium Trust, which owns the multimillion-dollar Rugby Park stadium.
"The debt is important for Rugby Southland, our balance would be insolvent."
But the three groups trying to find a solution - the Invercargill Licensing Trust, Community Trust of Southland and the Invercargill City Council - all say they can't cover the loan.
Mr Menzies said the organisation had been exploring the possibility of insolvency, which was "a possibility" for Rugby Southland.
"It would be bad news."
However, he remained confident the organisation would see the money it was owed.
"We have got our accounts in order, the only issue for us is the outdoor stadium."
If the stadium trust collapsed, no bailout option was found and the stadium was sold off, then the Southland Stags would have no appropriate playing premises and could be forced out of the ITM Cup, Mr Menzies said.
"There's got to be a solution and I think it would be a sad day for Southland if there wasn't rugby."
Invercargill Mayor Tim Shadbolt was not convinced his council would be the one to save the Stags. But talks did seem to have "a fair degree of goodwill". "There's just so much history there."
The community would have to be consulted on any decisions made or cheques written, he said. "I personally think it is too much of a good opportunity to lose."
But that opportunity could be hampered by the $750,000 debt owed to Community Trust of Southland by the stadium trust.
Community Trust of Southland chief executive John Prendergast said the community trust was still expecting to get the loan repaid despite the threats to Rugby Southland.
"Writing out cheques isn't always the answer, sometimes you have to think. There's no free lunch here, someone has to end up incurring that cost."
Mr Prendergast said the community trust had been in talks with the rugby union to come up with a way of repaying the $750,000 loan.
That loan was originally given to relieve pressures on Rugby Southland and the Outdoor Stadium Trust in 2008.
Rugby Southland had clawed its way back from huge losses and was now posting profits, profits he hoped could be used to repay the community trust, he said.
Iinvercargill Licensing Trust chairman and city councillor Alan Dennis said the licensing trust could not afford to cover any more than the loan owed to Pacific Dawn Ltd, worth about $150,000.
"The bottom line is Rugby Union is broke and it's their [stadium trust] ability to repay a large debt that's in question," he said at a council meeting last night. "There won't be a team, we mothball Rugby Park and we walk, that's a situation too."
Invercargill City Council chief executive Richard King said at the meeting if the council was to take over the stadium, it would need a viable tenant.
"We have all got to take a hit on this but it can't be so that it bankrupts Rugby Southland."
Rugby Southland had "considerable debt" in the past and the legacy of what happened "under different management" was still haunting it, Mr King said.
"It certainly will come before the council."
The stadium trust hoped the three funders could come up with a bailout solution by March 31.
City council director of finance and corporate services Dean Johnston said it was unlikely a solution would be found by then.
"It's just a date that they have put down; things aren't going to stop or start on that day."
The Southland Times