Six “old Natal families” are putting up R45 million to ensure the future of the Durban Country Club.
Haemorrhaging members and R30m in debt, the club’s trustees – who include Howard Buttery, Allan van der Veen and Harish Metha, with concerned “old Natal and Durban” families – have put together a “soft” loan over three years to pay off the club’s debt with Standard Bank and to make working capital available for a rescue plan.
The club’s auditors and board are not willing to sign off the annual financial statements.
“It’s insolvent,” said Buttery, who described the loan as “supreme support from people who want to see the Durban Country Club survive”.
The Beachwood golf course, which is owned by the club, will serve as collateral for the loan. A special meeting is scheduled for March 26, at which members are expected to approve the plan.
Buttery, who stressed that the families preferred to remain anonymous, said the club had done nothing over the past three years to deserve member support and that the rescue plan would “probably see more members leaving”, but he believed the club would be a product which the people of Durban would want to support and result in “old” members flooding back within three years.
The key to the plan, he said, was the hiring of local hotelier and Federated Hospitality Association of SA regional head Gerhard Patzer to turn the club’s fortunes around.
A number of former members, who would not be named, resigned their membership at the start of the year, saying that they would not pay the fees, which had almost doubled during the past 18 months. They were doubtful that the club’s fortunes could be reversed, as it was already running at a huge loss.
However, Buttery believed that the club was an asset to the city and said that a subcommittee was now established to look at “sweating the assets”.
“We have to completely change what we’re doing there. We have to create circumstances to make people want to go to the club… this is one of the best golf courses in the world,” he said.
The club’s financial woes began in 2006 when, with a loan from Standard Bank, a R60m “Renaissance revamp plan” was launched. It was aimed at increasing membership, but took a year longer than planned and overstepped the budget by R4m.
In 2010, the club posted a R9.5m operational deficit as World Cup business failed to meet expectations and the government’s stricter drinking-and-driving controls began to bite. Also, R600 000 was lost to theft.
In August 2010, more than 200 staff were retrenched and club chairman Richard Pemberton admitted that the Renaissance plan had failed as members continued to leave. Buttery said, however, that the plans of the past were not to blame. “That was before the recession. The world is a completely different place now. We can’t sit back and blame others,” he said.
If there was any hint of the new turnaround strategy not translating into profits, the outright sale or conversion of the Beachwood course into a high-end housing estate to repay the loan would immediately get under way.
In the notice of the March 26 special general meeting, members were told of three suggested plans if the rescue plan failed to work: “An outright sale of Beachwood, a partial sale and retention of the golf facilities, or an outright sale to a property developer (to create a golf estate), with golfing privileges retained for DCC members”.
In the meantime, two board members were also investigating the viability of the Beachwood club, said Buttery.
Patzer, who has years of hospitality experience behind him, said he could not divulge any of his plans until the meeting at the end of March.
“I’ve been working at the club for seven months already, but it’s a little too early to discuss my plans,” he said. “We still have to refine the whole thing and, of course, nothing can be done until the R45m is approved.” - The Mercury