New legal bomb drops on Newlands
NEWS: As that bromidic idiom goes: ‘It never rains but it pours.’ At Newlands that certainly rings true.
@rugby365com has reliably learnt that Investec has threatened to take legal action, should the Western Province Rugby Football Union follow through with a proposal to walk away from an agreement with the investment banking giant.
Werksmans, a pre-eminent corporate and commercial law firm acting on behalf of Investec, said the WPRFU ‘acted in bad faith’, adding that it reserves the rights of legal action.
This threat of legal action follows just a week after Aerios (Pty) Ltd, the agency which managed the advertising rights of the WPRFU since 2012, filed damages claims amounting to ZAR183-million.
SA Rugby is the first respondent and the WPRFU the second respondent in the Aerios claim – a saga dating back to when WP Rugby (Pty) Ltd declared bankruptcy in late 2016.
However, the Investec threat has potentially far more catastrophic implications for WPRFU.
It comes on the eve of a crucial Special General Council Meeting of the WPRFU – scheduled for Thursday, June 25.
As @rugby365com reported last week, this is when it will be decided if the WPRFU will accept a ‘loan’ from Flyt Property Investments (previously known as Any Side Investments (Pty) Ltd).
The loan will be used to pay back previous advances by Remgro Sports Investment (with interest now nearly ZAR60-million) and Investec (ZAR50-million).
The WPRFU plans to register a new Mortgage Bond on Newlands.
As @rugby365com reported earlier, the presence of Flyt explains why the WPRFU was willing to play hardball in their discourses with banking giant Investec.
However, the investment group is not about to roll over and play dead.
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Heads of agreement had been signed between Investec and WPRFU, before a boardroom ‘standoff’ developed – ostensibly because WPRFU President Zelt Marais declined to sign off on the final agreement.
It is believed Marais attempted to introduce a ‘material new term’ – long after commercial terms had been agreed and heads of agreement had been signed.
As a result, executive board member Kevin Kiewitz walked away from the union over the sudden about-turn.
It was then revealed that Flyt is the ‘new player’, secured by Marais – details of which were contained in the notice of the proposed SGM, scheduled for Thursday, June 25.
Flyt, on their website, states they ‘develop and add value to property through joint venture and independent projects’.
“We closely manage and co-invest in projects we believe in, completing rigorous and detailed evaluations beforehand to realise significant returns that create a tangible difference,” the Cape-based property developers say on their website.
It is believed that in the Investec deal the WPRFU would have received a minimal commission (some reports put it as low as one percent) to redevelop Newlands as part of a 99-year agreement, while with Flyt the WPRFU will be a 50 percent ‘partner’.
As we have said several times in the last few weeks, there may be a few more twists and turns that would make it hard to follow the plot.
Also worth reading …