Creditors closing in on 'bankrupt' WP
FINANCIAL UPDATE: The Western Province Rugby Union is facing bankruptcy, again, and it could be a matter of weeks.
rugby365 has reliably learnt that at least one creditor, Remgro, is ready to call in their ZAR40-million loan.
And the trouble doesn’t end there.
Fierce infighting and looming retrenchments are also part of the seemingly fatal malady at Newlands.
It is believed the former benefactor, Remgro, is keen on getting some property, owned by WP, – Brookside in Claremont or the rugby complex at Montreal Road, Oranjezicht, in the high-demand residential City Bowl area – as security for the loan.
However, the WP brains trust was not able to deliver on the ‘security’ – after the union’s clubs voted against it at a meeting on May 30 – and Remgro is now on the verge of calling in that loan.
It will create an enormous financial crisis for a union whose cash-flow is set to run dry in August,
The problem was not helped when a potential; benefactor – who claimed he had a partnership in European soccer clubs Dynamo Kiev (Ukraine) and Genoa CFC (Italy) – failed to come to the party.
In fact, it appears the ‘benefactor’, who does not appear on the list of partners for either club, has gone underground.
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There is a consortium that is keen to make an offer to obtain a 74.9 percent share in the union, but they have brassbound conditions.
This includes the departure of current President Thelo Wakefield and CEO Paul Zacks.
Wakefield’s presidency term expires at the end of the year, but he is gunning for the position as Chairman of the WP board.
It is believed plans are afoot to take the control – which currently resides with the union (and clubs) – back to the board.
It is this fact that is holding back the consortium from signing.
They want complete control of the employees and finance.
In fact, the consortium is willing to ‘walk away’ if Wakefield remains in the picture.
Another spin-off of Wakefield’s pending departure as President is that a nasty rivalry is developing between Peter Jooste and Zelt Marais to take over.
However, the real issue is around the Remgro loan and the crisis it will cause if the Stellenbosch-based investment company calls in its loan.
Already the WPRFU are planning to contract 60 players less in 2019 than they did this year, to help alleviate the cash crunch.
It is said they could be forced to declare bankruptcy again – just as they did, with the help of Remgro in 2016, to get out of paying out advertising company Aerios.
The latter has already gone to court to claim for damages. A pretrial hearing was held in the Western Cape High Court a fortnight ago.
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 approximately 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
@king365ed
@rugby365com
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Province answers Aerios
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Intriguing new twist in Province liquidation saga
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