Remgro to cough up in liquidation delay?
WP Rugby, the commercial arm of the Western Province Rugby Union, went to the Cape Town High Court on Monday in the hope of finalising their application for liquidation.
However, claimant Aerios – who opposed WP Rugby's application – ensured that all did not go entirely according to plan.
Judge Ashley Binns-Ward decided to reserve judgement on WP Rugby's application for liquidation, although the judge did not give a date for when he would announce his judgement.
The provisional state of liquidation was extended.
It means Remgro, who have already given the WPRFU a 'bridging loan' to meet its current financial obligations, may be asked for more money.
Chris van Zyl, the provisional liquidator for WP Rugby, told rugby365 that it is hoped that judgement will follow as soon as possible so that the way forward can be resolved one way or another "given that the provisional liquidators may well have to borrow more money" to meet the ongoing commitments in the event that the company is finally liquidated.
"In the event that the provisional order is discharged by the court then the company will revert to the management of its board of directors and they will then have to find funding at short notice to enable the company to continue trading," Van Zyl told this website.
Last week Remgro, in reply to questions by rugby365, was reluctant to disclose the extent of their involvement and financial assistance of the troubled WPRFU and WP Rugby.
However, it has been confirmed that they have provided a 'bridging loan' to the WPRFU to help them cope with their immediate obligations towards players and staff, as well as running costs.
Although unconfirmed, it is believed that Remgro may have advanced the initial loan, knowing that down the line they will get an additional 50 percent of the shares from WPRFU – upping their percentage to 74.
The way was cleared for Remgro to obtain a controlling share of the WPRFU when the South African Rugby Union last week made constitutional changes that allowed unions and franchises to 'sell' up to 74 percent of their shares to private enterprises.
It would be interesting to note what would happen if judge Binns-Ward was to discharge the provisional liquidation order, as Aerios – who claimed in court that WP Rugby's sole intended desire through the liquidation was to get rid of Aerios as one of its creditors – is believed to be owed in the region of ZAR7-million.
Would Remgro be willing to fork out that much, knowing that Aerios are entitled to a share of future commercial dealings?
The contract between Aerios and WP Rugby is meant to run until 2023.
By Jan de Koning
@king365ed
@rugby365com
