Cape Town - Western Province Rugby bosses remain tight-lipped amid reports that the historic Newlands Stadium building will soon make way for a mixed-use development.
It has been reported that the Western Province Rugby Football Union had voted to enter into a development agreement with Investec that would see the iconic structure demolished and turned into a residential and retail development. But neither Investec nor union president Zelt Marais were willing to comment on the deal.
According to unconfirmed reports, the union would be paid R110million from the deal, just enough to settle its major debt. In addition to the payment, which would be treated as a loan pending the outcome of the rezoning application, the union would also get a 5% share in profits from the development and 3.5% of resales of the units. However, no funds were expected from these sources for six years.
The union has been in financial trouble for years, which saw the liquidation of its commercial arm in December 2016. And last year, speculation was rife that the stadium was no longer financially viable - with the last game being played there in June last year.
This comes as one of the equity partners, Remgro Sports Investment said it had not been officially told of the new sale. But it welcomed the move if it meant outstanding debt from WP Rugby would be settled. Relations between the two parties soured towards the end of 2017 as a result of WP Rugby’s inability to pay back the money.
Remgro CEO Jannie Durand said the company was owed R52m (which included interest) and would be “happy to get our money back”.
Remgro bailed out the union with a loan at the end of 2016 when it faced bankruptcy and, according to Durand, registered a bond over the stadium as a form of security. However, it was not clear what plans there were to keep the union financially afloat nor where its next home would be.
For the past two years there have been negotiations to make the union an anchor tenant at Cape Town Stadium in Green Point from 2021.
It’s also not clear whether a company that took the union to court claiming that it was owed money for advertising rights would also be paid.
Aerios director Costas Constantinou was not available for comment.
In 2017 he said it appeared that a transaction relating to the sale of Newlands Stadium and the relocation of the union to Cape Town Stadium had already been concluded.
Cape Town Stadium has placed an enormous strain on the city’s finances and had announced that it was looking for an anchor tenant.