Newlands put up as security?
REACTION: It is believed Newlands has been put up as ‘security’ for outstanding debts, as the future of the iconic stadium remains shrouded in uncertainty.
Investment holding company Remgro confirmed to rugby365 that the Western Province Rugby Union has registered a mortgage bond – in favour of the Stellenbosch-based company – as security for an outstanding loan worth more than ZAR40-million.
The deadline for the registration of the mortgage bond, as security for Remgro, was this past Friday.
It is a result of WPRU’s inability to repay the loan – dating back to 2016, when WP Rugby (Pty) was liquidated and the union required a series of cash injections to pay its staff and for other running costs.
Remgro, via law firm ENSafrica, last month sent a letter of demand to WPRU President Thelo Wakefield and Chief Executive Officer Paul Zacks.
Jannie Durand, Group Chief Executive Officer for Remgro, confirmed that the bond registration was provided on deadline.
“I can confirm that they [WPRU] did indeed provide the security to Remgro, as required by the agreement,” Durand told rugby365.
Durand added that the surety bond is “for the full amount owed”, believed to be well over ZAR40-million.
However, the Remgro boss did not want to divulge which property it is on.
It is believed properties owned by WPRU that could raise a bond of more than ZAR40-million include the Brookside complex in Claremont or the rugby complex at Montreal Road, Oranjezicht, in the high-demand residential City Bowl area.
However, insiders say Newlands was put up.
The union’s clubs voted against putting up the stadium as security, at a meeting on May 30.
However, as the July 6 deadline loomed, WPRU officials were left with no alternative.
It is worth remembering that interest has been accruing on the original loan amount, since December 2016.
When rugby365 reported last month that Creditors were closing in on WPRU, Wakefield vehemently denied they were in trouble.
However, the weekend’s developments proved that rugby365’s report was much closer to the truth than what the WPRU President told his clubs, in a scathing letter in which he attacked this website.
Rumours of ‘talks with an equity partner’ have been doing the rounds for some time, but at least one of those ‘equity partners’ – if he was real – has gone underground.
Any equity partner must be willing to pay off the mounting debts of the union and also require approval by the South African Rugby Union.
There is also the ongoing legal battle with media and publishing agency Aerios, who recently filed damages claims against WPRU.
A pretrial hearing was held in the Western Cape High Court in late May.
Aerios believes it will be able to prove – in court – its claim for damages against WP Rugby. Aerios is claiming that it has suffered damages in the sum of more than ZAR250-million, as a result of the decision taken by the liquidators of WP Rugby to determine the advertising rights agreements which had been concluded with Aerios.
By Jan de Koning