Sydney Mardi Gras calls in administrators

Mardi Gras, now in its 26th year, is a highlight of the Sydney gay calendar

SYDNEY, Australia -- The group behind Sydney's annual Gay and Lesbian Mardi Gras has gone into voluntary administration after failing to find a last minute backer to pull it out from a mountain of debt.

Announcing the move Friday, accountants Sims Lockwood said talks were already underway on a new financial package and they were confident the internationally-renowned carnival would be rescued in time for the next parade in March 2003.

Now in its 26th year, the Sydney Mardi Gras is billed as the biggest gay pride event in the southern hemisphere.

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This year, however, the event was hit by the global travel slump following the September 11 terrorist attacks, sending attendance figures plummeting and failing to draw in much-needed revenue.

Lack of sponsors has added to the financial burden, as has the rising cost of liability insurance.

Earlier this week a mystery donor who had been promising a A$400,000 cash injection pulled out of talks leaving organizers with no alternative but to call in administrators -- the final step before receivership.

Tourist draw

For years the Mardi Gras has been a big tourist draw for Sydney, bringing in tens of thousands of overseas visitors.

However, the state government turned down appeals from organizers for a cash bail-out saying the money needed to rescue the event would be better spent on "hospitals, roads or drought relief."

The event draws in tens of thousands of overseas visitors

In a statement Friday the appointed administrator, Scott Pascoe from Sims Lockwood, said a number of potential supporters had indicated they would be willing to invest in the company "provided there is restructuring."

He added that arrangements were underway to ensure that next month's Sleaze Ball, a key revenue earner for the subsequent parade, will go ahead as planned.

Pascoe said the plan would involve putting the Mardi Gras managing company into a period of hibernation during the restructuring process expected to take about a month.