CAPE TOWN – A financial D-day that could have far-reaching ramifications is fast-approaching for the Western Province Rugby Union.
The WPRU's considerable money problems can be traced back to 2016, when Remgro - an investment holding company based in Stellenbosch - reportedly agreed to advance various loans totalling nearly R44-million in order to bail out the cash-strapped union.
It's believed that WP now need to register a mortgage bond as security for these loans, or face having to accede to a demand from Remgro to pay back the money within five business days.
According to a detailed report on the AllOutRugby website, well-respected writer Stephen Nell details how Remgro made loans of R7,51-million agreed on November 3, R7,51-million on November 24 and R19-million on December 22 back in 2016, while also processing an advance of R9,88-million to Newco – the new entity that rose from WP Rugby (Pty) Ltd. This all came amid the financial crisis that saw WP's professional arm ultimately liquidated.
As detailed, Remgro have now apparently served papers demanding that WP sign bond registration documents on some of their prime property in Cape Town and southern suburbs. Instead of going this route, WP are said to be seeking assistance from a possible equity partner, but while such negotiations are ongoing, Remgro remain determined to see the union enforce a commitment to registering a mortgage bond as security for the loans.
The deadline stipulated for action from WP is reported to be July 6, and if there is no action, Remgro could then go to the High Court to enforce the repayment of the funds within five business days. Besides these turbulent times, it's worth remembering that the WPRU is still locked in a battle with Aerios - the company that suffered significant losses through the liquidation of WP Rugby (Pty) Ltd.
In addition, Stormers coach Robbie Fleck remains under immense pressure following the under-performance of the team in Super Rugby, while there is yet to be any final clarity over the proposed move from Newlands to the new Cape Town Stadium.