Creditors have voted to accept a bailout plan for the cash-strapped Melbourne Rebels rather than liquidate the Super Rugby Pacific club.
At a meeting on Friday, creditors opted to follow the voluntary administrator’s recommendation and accept a proposal from a group of private investors that includes current directors.
The directors have proposed a deed of company agreement (DOCA) that guarantees employees 100 per cent of their rights but leaves unsecured creditors with just 15 cents on the dollar.
The club went into voluntary administration in January with total debt of $23.1 million, and PwC voluntary administrator Stephen Longley claimed in his report last week that the club could have operated insolvent for more than five years. .
The DOCA is also dependent on Rugby Australia (RA) handing over the Super Rugby participation license to the new consortium, which plans to invest more than $25 million in the club over the next five years.
RA, who have propped up the club this season, taking care of the salaries of players and staff, have given no indication of their plans for the club, which joined the competition in 2011.
The Australian Financial Review reported that RA planned to vote against saving the club and claimed Longley’s independent report was biased towards former directors.
The Victorian government is understood to have informed RA that, in the absence of a professional rugby presence in the state, it could withdraw from bidding for future Wallabies test matches and hosting the Rugby World Cup final.
Meanwhile, the Rebels will host the Blues at Melbourne’s Rectangular Stadium in round 11 of the competition later on Friday.
AAP
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