- WPRFU president Zelt Marais moving to partner with Cape Town-based property developers Flyt Property Development over Newlands redevelopment.
- Marais says union would receive a R112 million payment up front from Flyt that would settled Remgro and Investec debt.
- A move to Cape Town Stadium, Marais says, remains a priority for the union.
Western Province Rugby Football Union (WPRFU) is set to enter into a partnership with Cape Town-based property developer Flyt Property Investment (Pty) over the redevelopment of Newlands rugby stadium.
This comes after WP's R110 million deal with Investec over the proposed redevelopment of the iconic venue fell through.
According to WPRFU president Zelt Marais, the negotiations with Flyt Property Investments led to the drawing up of a proposed loan agreement between Dream World Investments 401 Proprietary Limited (a company within the Flyt group) and the WPRFU.
Under the terms of the loan, Dream World has agreed to advance R112 million to WPRFU to pay off its debt to Investec and Remgro.
"The loan is advanced at the prime lending rate for a term of four years," Marais said in a statement.
"The aim is to consolidate WPRFU’s debts and enable WPRFU to unlock the inherent value in the Newlands stadium property to put it on a firm financial footing."
Investec had already paid the WPRFU around R50 million of the R110 million that was agreed on between the parties for the rights to develop Newlands, while the union also owes Remgro a reported R58 million.
The partnership between the WPRFU and Flyt, Marais adds, is a 50/50 agreement in the form of a new company called Newlands DevCo and will see the union net significant income from anything generated from the Newlands development.
In the Investec deal, the WPRFU held a 5% share in any profits generated from the Newlands development.
"This will ensure the sustainable future of Western Province rugby and, specifically, the opportunity for investment in clubs in our poorer communities over the longer term," Marais said.
Marais confirmed that the deal with Investec had officially collapsed on 1 June due to "suspensive conditions not being met timeously".
"The suspensive conditions were that certain long-form agreements were to have been entered into by midnight on 29 May 2020 after having consented to five extensions," Marais said.
"However, the terms of the proposed development agreement set by Investec were not acceptable to WPRFU - acting in good faith in the best interests of its constituents - and the transaction contemplated in the agreement with Investec failed."
Flyt and the WPRFU then began negotiations on 3 June, Marais says, while the proposed partnership and loan agreement will be put to the WPRFU council at a meeting on 30 June. A special general meeting on 8 July will then further consider the proposal.
Marais was also hopeful that the deal with Flyt would help the union in their efforts to consolidate their position as an anchor tenant at Cape Town Stadium.
2020 was due to be the union's final season at Newlands because of the Investec deal and while a new partnership with Flyt could open an unlikely door for one more year at the venue until development begins, Marais emphasised that a move to Cape Town Stadium was still very much a priority.
"With WPRFU as its anchor tenant, the Cape Town Stadium will finally be used to its fullest capacity to the benefit of all Cape Town residents," Marais said.
"The move to the Cape Town Stadium heralds the beginning of an exciting new era in South African rugby. The Cape Town stadium is a state-of-the-art venue in one of the best locations in the City.
"Its world class facilities for rugby fans include a better viewing experience, top-notch safety and security measures, modern corporate hospitality suites, conferencing and banqueting facilities, and medical facilities. The stadium also has a variety of public transport options close by to broaden access for fans from all communities. This includes the Cape Town train station as well as the MyCiti and Golden Arrow Bus stations."
It is understood that Marais will experience resistance to the Flyt deal from within the WPRFU, particularly because the proposed agreement between the parties also sees the union also entering into another joint venture with Flyt that sees them give up total ownership of Brookside (home of Villagers Rugby Club).
"In addition, it is proposed that another new company will be incorporated between the WPRFU and Flyt Property Investment called Brookside DevCo," Marais added.
"This new company will purchase the Brookside property and its purpose will be to obtain development rights for the development of the Brookside property as a mixed-use development. This deal will give the WPRFU access to an estimated R40 million in cash, plus 50% of development profits down the line."
- Compiled by Lloyd Burnard