REVEALED: WPRFU's new benefactor
SPOTLIGHT: The ever-evolving Western Province Rugby Football Union financial saga is about to get another new and intriguing chapter.
It has been revealed that the WPRFU is ready to start talks with an ‘A-grade Commercial Bank’ to replace Dream World as the union’s benefactor.
This development is contained in a billet-doux communicated to the clubs this week.
The ‘memorandum’ – as it is titled – followed the bomb dropped by Flyt CEO Zane de Decker just over a week ago, when he revealed that his company was to claim ‘damages’ from WPRFU, over the latter’s decision to renege on the deal the two groups signed in June.
De Decker threatened to “call up the secured loans” that the Flyt Group holds over the Newlands stadium and other properties.
Should the ‘marriage’ end in an ugly divorce – as seems likely – it would be the third time in less than a year that WPRFU changed ‘partners’.
After walking away from agreements (which included loans) with Remgro and Investec, WPRFU also dropped their lawyers Smith Tabata Buchanan Boyes (the Blouberg-based company that represented them throughout the negotiations and finalisation of the term sheet and loan agreement with Flyt) like a hot potato.
Korbers Inc, a legal firm operating out of Cape Town central, is now acting on behalf of the union and sent a letter to Flyt – claiming the Newlands and Brookside properties were ‘undervalued’ in the agreement and should be valued between ZAR377-million and ZAR390-million, rather than the ZAR112-million of the agreement.
In this capricious and metamorphosing environment, it is clear that the two ‘partners’ are not in cordial discussions.
In fact, it is safe to say that the two groups are communicating only through their legal teams.
De Decker – before @rugby365com was aware of the communiqué to the clubs – suggested as much.
“We are still awaiting a formal response from the WPRFU to the letter sent by the Flyt Group’s attorneys last week,” he told this website in a written reply.
In the ‘memorandum’ to the WPRFU ‘members’ De Decker stands accused of being guilty of ‘grandstanding’ and ‘puffery’.
In a broad dispatch to its members, the WPRFU memorandum responds to every point in De Decker’s statement from the previous week.
It also addresses what appears to be one of the key technical issues – and point of dispute – between the two partners, whether there is a legal and binding agreement between the two.
“It should be noted at the outset, that De Decker describes the entity with which the union concluded the agreements as the ‘Flyt Group’,” the memorandum states.
“This has clearly been done in order to address various material technical difficulties which Flyt has.
“But, in any event, there is no such entity (either in law or in fact) as the ‘Flyt Group’.
“Flyt changed its name, shortly before concluding the Term Sheet, from a shelf-company called Any Side Investments [Pty] Ltd, and Dream World, for its part, is another shelf-company with only one director.
“Neither [Dennis] Venter nor De Decker is a director of Dream World.”
However, the real pearler is right at the end of the dispatch.
It says WPRFU is willing to return to the negotiation table should De Decker agree to the parties’ being restored to the ‘position they were in before the agreements were concluded’.
“An agreement could be reached whereby the loan amount [ZAR112-million] is returned against the release of the union’s assets.”
This confirms that the union’s assets – Newlands, Brookside and other properties – are held as security for the Dream World loan.
The memorandum adds: “The WPRFU has already set up discussions with an A-grade Commercial Bank to replace Dream World as [a] lender.”
Also worth reading …
Where will the money come from?
The big ‘split’ at Newlands
Marais explains the way forward
And the hits keep coming
Flyt bomb drops on Newlands saga
Change of attorneys at heart of WPRFU about-turn
New legal twist in Newlands saga
‘Miscommunication’ blamed for statement
Mystery of the missing sentence