EP’s Elephants could carry the Eastern Cape’s flag at provincial level in 2021 after the board of SA Super Rugby (Pty) Ltd — which trades as the Southern Kings — placed the insolvent Kings company into voluntary liquidation.
Shocked Kings players, who had continued to train after the team were withdrawn from the Currie Cup earlier in September because of financial reasons, were told of the decision on Saturday morning.
The Kings have endured trying times in recent months and their record of only one win in 13 matches before Covid-19 ended their season paints a bleak picture of a team which struggled to hold its head above water.
The teams’ defeat against Connacht at the Nelson Mandela Bay Stadium in March could do down in the history books as the last match played by the Kings.
Explaining the liquidation, Kings and EPRU chair Andre Rademan said: “It gives us the opportunity to refocus on creating a business model that is sustainable and right for rugby in the Eastern Province.
It’s time for the Eastern Province rugby community to consolidate and take stock. We have managed to put in firm foundations at the EPRU, after historic financial troubles, and we can look to build rugby in the region from that platform
“It’s time for the Eastern Province rugby community to consolidate and take stock.
“We have managed to put in firm foundations at the EPRU, after historic financial troubles, and we can look to build rugby in the region from that platform.
“This is very difficult news to give to people and the board would not have wanted it this way.
“But sport is a business and we are in unprecedented times.
“There was no other option.”
He said the decision had been communicated to staff and players.
SA Rugby said the decision had been taken to secure the longer-term financial future of rugby in EP.
The shareholders — the EP Rugby Union (EPRU) and SA Rugby — took the decision in the face of an accumulated deficit of R55m, and with zero income in prospect for the remainder of 2020.
“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,” Rademan said.
“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 pump in further funding.”
SA Rugby president Mark Alexander said 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 in 2020 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
“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,” Alexander said.
“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.”
SA Rugby resumed ownership of a 74% shareholding in the Kings in June following the failure of the previous owners — the Greatest Rugby Company in the Whole Wide World (GRC) — to honour contractual commitments in relation to its purchase of the shares.
The GRC had acquired the shareholding in January 2019, but was unable to deliver on the promised turnaround strategy.
The Kings’ struggle to build a sustainable business model had twice seen it fall into management control by SA Rugby.
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