New Newlands bomb about to drop?
BREAKING NEWS: The protracted Newlands Stadium saga is about to get a dramatic new chapter.
It is believed the Western Province Rugby Football Union is about to walk away from a development deal with a banking giant, despite having already received an ‘advance’ as part of their partnership.
@rugby365com has learnt that executive board member Kevin Kiewitz has walked away from the union over the sudden about-turn.
WPRFU President Zelt Marais was not immediately available to comment on the latest development, but in a letter to the clubs he confirmed Kiewitz’s resignation – without giving a reason.
As a result, the WPRFU may be required to repay the Investec ‘advance’ by month’s end, while there are also ‘demands’ for them to repay a loan to Remgro – which started out at ZAR40-million, but with interest has ballooned to over ZAR50-million.
Should the Investec advance become payable, it will create a major cash flow crisis for the already cash-strapped union.
As part of the agreement between the banking giant and the WPRFU, Newlands was to be ‘demolished’ and turned into a multipurpose office-cum-residential development.
WPRFU reportedly entered into an agreement with the asset management group, who will provide the union with a ZAR110-million ‘loan’ for the development rights to the stadium from 2021.
The banking group will take on the development on a 99-year lease.
The ZAR110-million would have assisted WPRFU with their cash flow issues, including helping them settle the debt of over ZAR50-million they have with Remgro.
It would have left the union with over ZAR50-million as working capital.
It is believed the ‘advance’ from Investec was part of this agreement.
That, advance, however, now has to be repaid.
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The plan was for the WPRFU to get an income from the development of Newlands, but it will take several years before the new property is complete and the money starts coming in.
In November it was confirmed that the City of Cape Town’s Council has approved a Binding Heads of Agreement between the City, the Cape Town Stadium and Western Province Rugby – which will make Western Province Rugby the primary Anchor Tenant at the Cape Town Stadium from February 1, 2021, in a deal that potentially spans the next 99 years.
The parties have agreed on a mutually beneficial revenue share model whereby Western Province Rugby will have preferential access to play all senior professional rugby matches at the Cape Town Stadium.
If the WPRFU does pull out of the Investec deal, it may impact on their plans to move to the Cape Town Stadium.