Sufficient cash to keep Boks, but WP seek ‘long-term marriage’ with equity partner

By Ashfak Mohamed 10h ago

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CAPE TOWN – Western Province Rugby Football Union president Zelt Marais has assured Stormers fans that despite the ongoing boardroom challenges, the big-name Springboks at the union will be able to remain in the Cape if they wish to do so.

WP Rugby are still in negotiations with American consortium MVM Holdings to become shareholders, but Marais also stated during an online press conference on Wednesday that the union are open to discussing those options with other potential equity partners and investors.

The exclusivity agreement with MVM, headed by former Durban businessman Marco Masotti, has lapsed, but Marais and WP board chairman Ebrahim Rasool were at pains to explain that they were still in talks with MVM.

In addition, two representatives of current sponsors DHL and BrightRock, Hennie Heymans and Suzanne Stevens, resigned from the WP board this week, but the WP bosses insisted that it had nothing to do with the delay in concluding an investment deal.

The major worry is that the uncertainty could result in the Stormers and WP losing stars such as captain Siya Kolisi, World Player of the Year Pieter-Steph du Toit, and front-rowers Steven Kitshoff, Bongi Mbonambi and Frans Malherbe to overseas clubs, but Marais was having none of it.

“We can give the assurance that we will retain our top-performing players, and we sincerely hope that we don’t incur any injuries along the way, because we have invested heavily (in them),” the WP president said.

“The clubs personally have invested a lot in those players last year, prior to the World Cup – and if Western Province, via its clubs, did not invest in those players in 2019, there would have been no World Cup today in South Africa.

“That is the commitment that the clubs have given us and to South Africa – that we care in terms of what we do, and we give the assurance that we will retain all our top players on a continuous basis. And even into perpetuity.

“There is sufficient cash-flow going forward for us in the short and medium-term. We are having ongoing meetings with SA Rugby, and there are various measures, even from the World Rugby side.”

This is a long-term marriage, and sometimes the dollars might be flashing and look nice, but the short-term greed could be a long-term disaster, according to Zelt Marais. Photo: Karen Sandison/African News Agency (ANA)

MVM Holdings have made an initial offer in the region of R100 million for a 51 percent stake in the WP professional arm, but that evaluation seems well short of what the brand is worth, and Marais noted that his union won’t just be chasing the “dollars”.

He confirmed that loans worth R112 million from Remgro and Investec have been paid back, following the agreement with Flyt Property Investment, who are their partners in developments at Newlands and Brookside.

Marais explained that the Brookside development could take up to two or three years to start due to a rezoning process, while Newlands may have to wait about four years, with completion in phases over seven to 10 years.

But in the next few months, WP are looking to finalise an equity partner. Rasool stated that he will write to Masotti and the MVM consortium to ask for a proper proposal document, and that there could be a “decisive meeting which says aye or nay” between the two parties in South Africa in November.

“We are looking for an equity partner – not only as an investor, but a person that specifically can add value in economic terms and committed legally, and a win-win for both parties; not just with warm words,” Marais said.

“This is a long-term marriage, and sometimes the dollars might be flashing and look nice, but the short-term greed could be a long-term disaster. So, we must be very sure in terms of where we go and how we do it, so that we do our best for the constituencies we serve and for rugby in South Africa.

“Western Province are probably in a better position than probably most of the other franchises, as we are the only organisation and shareholder that has a back-up asset base that is second to none.

“We don’t want to merely dispose of those things, but unlock the values and ensure there is long-term sustainability for the organisations.

“In terms of the (property) deals, we are not renegotiating anything, but just tuning the fine points of the agreement as part of our fiduciary duty to our shareholders, to ensure it’s done in the best interests of all parties.”


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