Newlands rugby stadium (Gallo)
The Western Province Rugby Football Union (WPRFU) council on Tuesday night voted in favour its a partnership with Flyt Property Investment.
The deal will now need to be ratified at a special general meeting on 8 July that would see it all the way over the line.
WP now stands to receive a loan of R112 million from Dream World Investments – a company within the Flyt group – that would be used by the union to pay off its outstanding debts to Remgro and Investec.
Flyt and the WPRFU would also then be joint owners of a new company called Newlands DevCo that would be equally invested in the redevelopment of Newlands rugby stadium and any profits that come from that project, which is expected to take between three and four years to complete.
WPRFU president Zelt Marais believes the deal will leave the union in a stronger financial position than was the case in their previous deal with Investec, where WP was set to hold just a 5% share in any profits generated from the Newlands development.
Investec had already paid the WPRFU around R50 million of the R110 million that was agreed on between the parties in a deal for the rights to develop Newlands, while the union also owes Remgro a reported R58 million.
The WPRFU must pay back the R112 million loan within four years. Failure to do so will place R250 million of its property assets at risk, which the union has put up as security for the deal.
More to follow …
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