Cape Town - The Western Province Rugby Union has been granted a final liquidation order of their commercial arm, the WP Rugby (Pty) Ltd, in the Western Cape High Court on Tuesday.
The WP Rugby Union were handed a provisional liquidation order for the company on November 7, but the final liquidation was opposed by one of the creditors, Aerios, who has lodged a claim of around R72 million for a contract it had with WP Rugby (Pty) Ltd to provide services such as wi-fi, media and other commercial rights.
But Judge Ashley Binns-Ward made the liquidation order final on Tuesday, which means that the company is now liquidated.
Chris van Zyl, managing director of Mazars Recovery and Restructuring, is the appointed liquidator.
Since the provisional liquidation was granted, the 24.9 percent stakeholder in the WP company, Remgro, is believed to have provided a “bridging loan” to pay salaries and contracts.
But now the final liquidation order effectively allows a new company to be established, and if that happens, Remgro or any other third party will be able to own 74 percent of the commercial arm of WP, following a recent decision by the SA Rugby Union to increase that amount from 49.9 percent.
At the time of the provisional liquidation, WP Rugby president Thelo Wakefield said that factors such as a difficult economic climate, resulting in a smaller sponsorship pool; increasing player wages, a confusing Super Rugby format, a diminished Currie Cup; an improved home-viewing experience; and declining gate and season-ticket sales were contributing to a “worsening financial position”.
But it appears as if the conflict with Aerios led to the liquidation. “These issues were exacerbated by the fact that over time certain commercial contracts with terms which have proved not to be favourable to WP Rugby (Pty) Limited were entered into, and which had the cumulative effect of putting both the company’s short term and long term sustainability at severe risk,” Wakefield said.
“The tipping point for our finances was the persistent and complex legal disputes relating to certain commercial, media and wi-fi rights with one partner in particular, Aerios, over the last year. This has hampered our ability to conclude key sponsorship and suite agreements which, in turn, has destabilised our relationships with key stakeholders and supporters, impacted materially on our cash-flow and ultimately led to the business of rugby being commercially unviable.”
Wakefield and Van Zyl were unable to respond immediately to queries from Independent Media on Tuesday on the way forward for WP Rugby and creditors.
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