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    How WP Rugby may be plucked from cliff edge

    2019-06-28 11:47

    Rob Houwing, Sport24 chief writer

    Cape Town - A private school group could hold a key to severely embattled WP Rugby being rescued from financial disaster.

    Jevron Epstein, founder and managing director of Generation Schools, which falls under the portfolio of JSE-listed investment holding company Trematon, confirmed lease-arrangement interest - believed to involve the potential building of school campuses on WP Rugby-owned properties at Brookside in Claremont and at the Tech-Gardens site in Oranjezicht - to Sport24 this week.

    “Generation Schools approached WPRU to investigate the opportunity of building schools on some of their properties,” he said.

    “These schools would be in partnership with WPRU, focussing on rugby - and other sport - and education as the catalysts for change in education and grassroots sports.”

    It is understood that after early promise to negotiations, Generation appeared to have been thwarted by a closed tender deal awarding Southern Palace Group of Companies (SPG) development rights to low-rise apartments at Brookside, where Villagers, the second oldest rugby club in the country, have a binding lease agreement with WP Rugby.

    Their lease of land, including their clubhouse and three fields, terminates in 2028 with an option of a 10-year extension.

    SPG, the wholly black-owned and managed diversified industrial holding company who also have a three-year sponsorship deal with the Springboks, had earlier, in 2017, told Sport24 they were in “discussions” with WP Rugby, which included the issue of the sale of Newlands stadium.

    Among their fairly recent investments have been the purchase of Murray and Roberts Construction, now Concor.

    Then-president of the WPRFU, Thelo Wakefield, simultaneously moved to deny to their clubs that an agreement was already in place, and there have been no further publicly-disclosed revelations around the Newlands sale issue since then, despite the growing likelihood that the ageing facility will be vacated in time for a 2021 shift to Cape Town Stadium.

    Generation Schools also appear to be back at the table with WP Rugby over leasehold possibilities at both Brookside and Oranjezicht, as Epstein added, perhaps pointedly: “We still believe a partnership of this nature would benefit all involved.”

    Generation started in the Western Cape with a campus in Sunningdale in 2016, and has since opened others in Hermanus, Melkbosstrand, Hout Bay and elsewhere.

    Their aim is described on their website as “striving to build a community within a school environment”. They “challenge and adopt a future-focussed approach to the way we teach our students”.

    It is understood that significant income could be generated by both the developer and the cash-strapped WPRU in the event of a deal being struck - possibly enough to repay, or at least going close to doing so, loans due to Remgro, the former WP Rugby equity partner.

     Approached for comment, Villagers president Anton Chait, a former Western Province flyhalf, said: “Villagers were approached by the Union about a year and a bit ago, where they put the B and C fields out on tender for development.

    “It was not on an outright sale basis; it was on a leasehold basis, for 49 or 65 years, or whatever it was. It is doable ... it’s not a common way of disposing of property but it is clever, because it provides the Union with annuity income.

    “We were requested by the Union to amend our lease, because we had to agree to the disposal as the lessee or tenant. We did that - we held a special general meeting, had presentations by the Union, our members voted and we agreed to amend the lease.

    “We were under the impression SPG were going to do a residential development here. Rental stock … one, two and three-bedroom apartments, ground, first, second, called “walk-ups” in the property development industry; there’d be significant income both for the developer and the Union.

    “That sort of fell apart overnight, and we were then advised that Generation Schools had shown interest in the site. When you think about it, they’d be a perfect tenant for this property; the zoning is in place and they could start building fairly soon after taking occupation of the property. They are very advanced and forward-thinking.

    “I believe (negotiations) have been resurrected, though Villagers haven’t been formally advised by anybody that they are back on track.”

    Among a host of other flashpoints or impediments to good order at the ageing Newlands ground, it is increasingly clear - as there has been no clear-cut denial - that the WP Rugby financial tank is well into reserve, a red light flashing, with reports that one month’s worth of cash is available for staff and player salaries.

    This comes at a particularly bad time in terms of retention/recruitment of much-treasured top-category players, as the wind-down from one Super Rugby season coincides with key planning for the next by the Stormers.

    The futures in Cape Town of some their most pedigreed, marketable figures like Siya Kolisi and Pieter-Steph du Toit (vital components if John Dobson’s head coaching regime is to get off with a suitable bang in 2020) hung in the balance at the time of writing, influenced in no small measure by the boardroom instability.

    Severely aggravating the situation, former equity partner Remgro Sports Investments is tightening screws (interest mounting all the while) for repayment of loans to the tune of R40m-plus, delivered ahead of their flying an increasingly chaotic coop.

    Further, WP Rugby remains as mired as ever in the dispute - with its associated, debilitating volume of paperwork/litigation - with former commercial partner Aerios, which is claiming around R276-million from WP Rugby’s business arm (liquidated in 2016) for their alleged reneging on an advertising rights contract with the union.   

    The matter has gone relatively “quiet” publicly of late.

    But when asked this week about progress with the Section 417 inquiry instituted in 2017 – a probe into the affairs of a bankrupt company - Aerios’s chief executive Costas Constantinou said: “As far as I am aware, the report leading up to the prior liquidation is sealed to the public. My legal team has instructed me not to provide any comment thereon at this stage.

    “That said, I can tell you that the fight is far from over. Aerios’s instigation of the S417 inquiry exposed facts that will be used in court proceedings that we will launch against WPRU and related stakeholders later this year.

    “As far as I am aware, the records of those court proceedings will be in the public domain; they will make for very interesting reading.”

    Sport24 on Thursday sought an interview with Zelt Marais, elected as new president of the WPRFU a few months ago, for his take on the financial crisis at Newlands and plans to resolve it, but had not received a reply at the time of writing.

    Business in the professional arm of WP Rugby is known to be tension-fraught, at present, amidst reports that CEO Paul Zacks is being increasingly disempowered, and earmarked for a severance package, as the amateur arm asserts itself in a power struggle with the professional one.

    *Follow our chief writer on Twitter: @RobHouwing

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