Lions Rugby Union bankrupt – report

2011-07-01 07:23

The Golden Lions Rugby Union (GLRU) is bankrupt.

Beeld newspaper reported today that this was why negotiations with Guma TAC to buy a 49.9% stake in the club had fallen through, said the Afrikaans daily, quoting from a document obtained by Sport24.

The document is part of Guma TAC businessmen Robert Gumede and Ivor Ichikowitz’s explanation on why they had terminated the agreement.

It says the GLRU owes Absa R30 million, a loan that needs to be repaid by Monday, and is not in a position to pay salaries.

This document was sent to GLRU president Kevin de Klerk on June 27.

The GLRU announced the next day that negotiations with Guma TAC had collapsed.

“We have worked very long and very hard at the union to deliver a workable final shareholder’s agreement,” De Klerk said in a statement on Tuesday.

“We were prepared to keep working on that process, but unfortunately the agreement could not be concluded.”

De Klerk told Beeld that “each item in that document is arguable”.

“All I want to say is that the Lions will survive. The rugby union has survived for 120 years and will continue surviving.”

He said Lions employees and players would be paid their salaries.

The document states Guma TAC secured R100 million in sponsorships for the GLRU, which it could now lose, that Guma TAC gave Absa funding guarantees in December and January in order for the Lions to pay salaries, and that the Guma group had negotiated for the payment of the Absa loan to be postponed to July 3.

It says the GLRU had up to 90 players on contract, many of whom did not attend practice sessions, and that Lions ex-coach Dick Muir was receiving a salary of R2.2 million per year, even though he had not been actively involved in coaching since May last year.

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