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- Flyt Property Investment is claiming “damages” from the Western Province Rugby Football Union for breaching an agreement.
- Flyt says the claim stems from the WPRFU’s “repudiation and breach of binding agreements” that it signed in June 2020.
- At the time, WPRFU President Zelt Marais called the successfully concluded transaction “the deal of the century.”
Move real estate investment is claiming “damages” from Western Province Rugby Football Union (WPRFU) on the breach of an agreement signed earlier this year.
Move CEO Zane de Decker It said in a statement Thursday that the claim stems from the “repudiation and breach of binding agreements” by the WPRFU that it concluded with the company in June.
“Today, Flyt Property Investment and a partner company Dream World Investments (‘the Flyt Group’) formally filed a claim with the Western Province Rugby Football Union for damages,” De Decker said in the statement.
Agreement was reached for the planned development of the Newlands rugby stadium and other properties owned by the WPRFU.
In the statement, Flyt says that the WPRFU approached them seeking a loan of R112 million to settle impending debts and conclude a development agreement in June 2020.
This was only 30 days before their existing outstanding payment obligations to Investec and Remgro for R112 million were due.
The measures taken by Flyt are due to the WPRFU apparently seeking a way out of the deal, despite the union’s president, Zelt Marais, calling it the “deal of the century” in June.
The statement continues:
“The Flyt Group’s strong balance sheet and ability to finance a deal of this magnitude without bank financing, and associated delays, meant that it could act quickly to consider advancing the funds that WPRFU was seeking.
“The legal teams and advisers of Flyt Group and WPRFU worked 24 hours a day, 7 days a week during June to negotiate an agreement that was tailored to both parties. It is well known that the development transaction between WPRFU and the Flyt Group that was validly concluded in July 2020 would use the WPRFU assets, including the land on which the Newlands Rugby Stadium and Brookside Rugby Club are located, more efficiently for the Union’s economic viability in the short, medium and long term Fundamentally, the agreement concluded would provide the WPRFU with a much needed and sustainable financial lifeline as a 50:50 partner in all economic benefits derived from future development.
“WPRFU President Zelt Marais called the successfully concluded transaction ‘the deal of the century’. It is therefore a surprise that the WPRFU now appears to be looking for a way out of the deal it was seeking and on a land value. which it determined, which was also concluded after a full and transparent approval process.
“WPRFU and Flyt Group concluded valid agreements on July 10, 2020 after all required WPRFU forums supported the agreement by an ‘overwhelming majority’. WPRFU financial advisers presented a comprehensive analysis to the various bodies decision-makers of the Union that approved the transaction. This included the Council on June 30, 2020, the Union on July 8, 2020, the Executive Committee on July 8, 2020, and the Trustees on July 9, 2020 The entire process was supervised and guided by the WPRFU legal team at STBB, its BDO auditors and its professional advisory team.
“The Flyt Group has met all the requirements of the agreements to date. These include the payment of the R112 million guaranteed loan to WPRFU; the incorporation of Newlands and Brookside DevCos; and the appointment of a board of directors for both companies.
“Despite the Flyt Group’s compliance with the agreements entered into, the WPRFU has inexplicably chosen to replace STBB as its legal advisers with a new trial attorney, and has deliberately reneged on the transaction. The WPRFU has done so by now opposing the the agreed land value that is part of the essence of the transaction and, through its conduct, acts in blatant disregard for the binding nature of the agreements.
“It is important to note that the agreed land value was proposed by WPRFU, not Flyt Group. This value was later incorporated into the Newlands and Brookside DevCos, who are co-owners of WPRFU and Flyt Group. Demand that the price be increased six months after the conclusion of the deal is simply outrageous.
“The Flyt Group has received comprehensive legal advice from a senior attorney and has its rights guaranteed under the agreements duly entered into with the WPRFU. Accordingly, the Flyt Group will now sue for damages under the agreements, as you have the right to do so.
“The Flyt Group is in the process of quantifying its substantial damages which, in addition to its direct costs, will include losses incurred as a result of the missed opportunity to develop both the Newlands Stadium and the Brookside property as the parties intended.
“The Flyt Group had looked forward to working with the WPRFU to jointly develop the Newlands and Brookside properties, thereby supporting the Union’s commitment to strengthening rugby in the poorest communities and ensuring a sustainable future for Western Province rugby. .
“However, if WPRFU does not compensate the Flyt Group for its damages, it will have no choice but to go to the appropriate forum for help in demanding payment. This will include applying for the secured loans that Flyt Group has on Newlands Stadium and other properties. . “
– Compiled by Sport24 staff
