Wellington - The Otago Rugby Football Union (ORFU), once one of the pillars of the sport in New Zealand, put off immediate liquidation Friday and revealed the existence of a possible lifeline.
Faced with debts of NZ$2.35 million ($1.97 million), the Otago Union said earlier in the week it would fold at 4pm Friday, but at the last minute announced the move had been delayed for a week.
"We considered the state of play and where we've got to in unravelling the true position of the union, and we've decided to extend the deadline for seven days," ORFU president Wayne Graham said.
Otago's precarious financial position does not affect the Otago Highlanders Super 15 team, which is a separate legal entity and not liable for ORFU debts.
A number of wealthy possible benefactors have been in talks with ORFU in recent days about a potential recovery package, but New Zealand Rugby Union chief executive Steve Tew declined to go into details.
He said Otago's financial future remained bleak but agreed on the need for more time. "The key parties have been talking since Monday and have identified some options that warrant further examination," Tew said.
"It makes sense for the union to delay proceedings to allow these parties more time to undertake proper analysis."
Several other provincial rugby unions in New Zealand are also wrestling with debt problems as they face rising player salaries at the same time as diluted revenues from ticket sales and sponsorship.