Carnegie hope CVA deal can provide financial lifeline

Cash-strapped Carnegie yesterday announced they had proposed a CVA with its creditors in a desperate bid to pull clear of their financial mess.

They have been in turmoil for months since a significant shareholder unexpectedly pulled the plug on planned spending.

That left the Championship club – who had until recently still held hopes of returning to the Premiership – in dire straits and they said they would instead operate as a part-time operation in 2019-20.

However, while rival clubs have already begun pre-season training, Carnegie do not even have a squad put together or a coaching staff of any sorts with its future in such severe doubt.

All players out of contract left at the end of the season having been advised to find new clubs.

Nine players did remain under contract for next term – many having arrived on big money from New Zealand clubs last autumn – but Carnegie cannot now afford to honour them, prompting, in part, the need to ask for a CVA.

The contracts of those players are believed to be worth around £1m alone – more than Carnegie’s entire reduced budget for next term.

All nine needed to agree a severance deal for things to move forward but some did not accept the compromise and the club’s hierarchy have also failed in their bid to find new investors.

A statement read: “Leeds RUFC Ltd, trading as Yorkshire Carnegie, have today proposed a Company Voluntary Agreement with its creditors and Begbies Traynor in Leeds have been appointed to act as joint nominees and supervisors.

“Directors of Leeds RUFC and its holding company Yorkshire Tykes Limited, whose consortium of investors have supported the clubs since 2014, have worked hard to replace the significant loss of funding support but no new investors have been found.

“The proposed CVA will be achieved following a lump sum contribution from Yorkshire Tykes Ltd which will enable a dividend to be paid to unsecured creditors. A new operational, break even plan for the 2019-20 season has been presented to the RFU with the Yorkshire Carnegie club continuing to stage matches at Emerald Headingley Stadium and the team operating from the Leeds Rugby facilities at Kirkstall.

“The Board hope creditors will continue to support the club and approve the CVA to ensure Yorkshire Carnegie continue to operate in the Championship in 2019-20 and beyond.”

For a CVA to go ahead, it must be approved by creditors who are owed at least 75 per cent of the debt and, if not, the club will face liquidation.

Of those signed in the autumn, when Carnegie were preparing thinking they would be able to make a promotion push next term, former New Zealand Under-20s prop Tom Hill has moved onto Nottingham and ex-North Harbour lock Cian Romaine has followed director of rugby Chris Stirling to Cornish Pirates. Others who have yet to announce moves elsewhere are Fa’atiga Lemalu, Myles Thoroughgood, Nic Mayhew, Antonio Kiri Kiri, Jade Te Rure, Elijah Niko and Craig Mitchell.

Captain Richard Mayhew – who has been with Carnegie since 2016 – is also contracted until the end of next season.