Rugby: Loss of $4.5 million on sale

The Otago Rugby Football Union made a big loss on the sale of Carisbrook as it valued the ground through how much it cost to build it.

In its annual report released this week, the union said it had made a loss of $4.5 millon on the disposal of properties, that being the selling of Carisbrook to the Dunedin City Council.

The council paid the union $6 million for Carisbrook and that money was used to pay down loans owed by the union to both the council and a bank.

But the union had Carisbrook valued at just under $11 million on its books, as the union came up with its value from the cost of the land and building of the stands.

With Carisbrook now sold, the union has less than $1m worth of assets.

Otago Rugby Football Union business manager Neville Frost said the cost of Carisbrook in the union's books came from the true cost of building new stands, and the land.

He said the union had always valued the ground that way.

The council had paid the $6 million last August although the union retained all of the chattels relating to the operation of the stadium.

Union chief executive Richard Reid said the selling of Carisbrook should make a positive impact on future operating results.

When it owned Carisbrook, the union was paying upwards of $500,000 annually in interest payments depending on what the interest rate was.

That would no longer have to be paid.

The union had also arranged an additional unsecured overdraft facility of $200,000 due for repayment in April this year.

Reid said this had been put in place to see the union through a difficult time when the cash flow was limited.

The overdraft was not needed last year as the union had a cash surplus.

The union reported an operating loss of $764,531 to November 30 last year.