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After almost five years, Western Province creditor is calling in its R250m debt

After almost five years, Western Province creditor is calling in its R250m debt
Seabelo Senatla of Western Province in a Currie Cup match against the Blue Bulls at Newlands Rugby Stadium on 13 July 2019. (Photo: Ashley Vlotman / Gallo Images)
Craig Ray
By Craig Ray
6 Mar 2025
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The company that loaned the Western Province Rugby Football Union R112m nearly five years ago is instituting legal action to reclaim its money.

Like ripples from a stone thrown in a pond, the ramifications of poor leadership decisions by former Western Province Rugby Football Union (WPRFU) president Zelt Marais are inevitably turning into larger waves.

After nearly five years of trying to sell Newlands Rugby Stadium after a series of poor management decisions by Marais and his enablers, the WPRFU seems headed for court in a R250-million claim.

Dream World Investments, which advanced the union R112-million in August 2020, understandably wants to be repaid with interest and other costs. That total is R250-million.

western province newlands Salmaan Moerat of Western Province takes a lineout ball in a Currie Cup match against the Lions at Newlands Rugby Stadium on 27 July 2019. (Photo: Ashley Vlotman / Gallo Images)



The WPRFU has been in administration for three and a half years as a consequence of those boardroom decisions back in 2020.

The major priority for the succession of administrators, starting with Rian Oberholzer (now SA Rugby Union CEO) and currently with Peter Jooste, has been to repay the debt by selling Newlands.

In the interim, the Stormers were bought by the Red Disa consortium and have been removed from under the WPRFU umbrella, meaning that whatever happens to the province (amateur arm), will not affect the professional team. That is a bit of good news.

western province senatla Seabelo Senatla of Western Province in a Currie Cup match against the Blue Bulls at Newlands Rugby Stadium on 13 July 2019. (Photo: Ashley Vlotman / Gallo Images)


Flyt Plan


In June 2020, Marais and the rest of the WPRFU leadership jilted Investec Property at the 11th hour after they had agreed a deal for the sale of the development rights to Newlands Stadium. Now the union faces bankruptcy.

Marais walked away from the deal, despite the union having already received a R50-million advance from Investec and signed heads of agreement in December 2019.

He revealed the little-known Flyt Property Investment as the WPRFU’s new “partners” in the redevelopment of Newlands and another property called Brookside.

Despite the framework for the Investec deal taking more than a year to finalise, somehow comprehensive due diligence on the Flyt agreement was done in a matter of three weeks.

Marais sold the plan to the WPRFU General Council on the basis that the WPRFU would receive an immediate R112-million loan from Dream World Investments (Flyt’s parent company) to cover its existing debts to Remgro and Investec Bank. The council backed Marais and walked away from Investec. 

Dream World paid R52.97-million to Investec Bank on 21 August 2020 and, on the same day, paid R57.76-million to Remgro to clear the WPRFU’s debts. 

As security for the loan, 11 properties owned by the WPRFU were registered with Dream World.

The WPRFU and Flyt became 50% partners in a new company set up with Flyt to redevelop Newlands and Brookside. Even though the WPRFU is not a property developer, it somehow believed this was a better arrangement. 

The Flyt deal turned sour six months later over a dispute over the agreed valuation of Newlands, which Marais tried to alter.

Read more: Flyt to fight Western Province Rugby Football Union after deal dispute

According to subsequent court papers lodged by Dream World at the Western Cape Division of the High Court in March 2021, the WPRFU “acknowledged that it was indebted to Dream World in the sum of R250-million”.

Understandably, Dream World wasn’t having it when the terms were in dispute and they sued the WPRFU for R388-million in damages and for the repayment of the R112-million loan plus interest and costs.

That lawsuit was averted when Saru exercised its rights and put the WPRFU under administration, removing Marais from power.

Now those debts are being called in.

Read more: Almighty battle for survival of the Western Province Rugby Football Union

Time to pay


After all this time, Dream World has been out of pocket and its patience has worn thin.

The initial detail of the WPRFU-Flyt deal envisaged the formation of a new company to manage the redevelopment of Newlands, called NewlandsDevCo.

The board of that entity was to be “controlled and managed” by Flyt, according to Marais’s pitch to the WPRFU General Council in May 2020.

Flyt would cover the planning costs on “loan account” while further working capital was to be sourced from other parties.

If, after four years, planning approval was not given (there has been no progress on that front), Flyt had the right to exit the NewlandsDevCo and claim payment planning costs, including interest, from the WPRFU.

It wasn’t a great deal for the WPRFU as much risk sat with them. Flyt/Dream World may have been opportunistic, but it was Marais and the WPRFU council that approved it.

“We’ve given Western Province as much time as we possibly could to sell the properties, which is ultimately the only way to really settle the debt,” Dream World’s property director Riaan Munnik told Daily Maverick this week.

“The layman’s term that we use is we’re calling up the bonds, and that entails a litigation process.

“So you need to get the court date and the court needs to decide, ‘yes, Western Province is in breach and, Dream World, you have the right to call up the bonds’. 

“In other words, we can take the properties and put them on auction to get our money back.

“But that in itself is not straightforward. Looking at how busy our courts are in South Africa, it is a long process. This wasn’t our first choice. We have actually paused the litigation process before, so as not to put undue pressure on Western Province and Saru since the union was under administration. 

“And we felt positive that the regime appointed to handle the administration of the Union were going to fix things. But I think the challenges of selling those properties, especially Newlands, have been underestimated. 

“And, unfortunately, the team that led the administration for Western Province couldn’t sell the properties either. 

“It leaves us with no choice as a business.”

Problems


Munnik outlined that the sale of Newlands had been difficult because there were so many variables, such as the processing of development rights.

One of the delays in the sale of Newlands was when a group, headed by former Springbok captain Wynand Claassen, claimed that Newlands was a heritage site.

It delayed negotiations with potential buyers at a sensitive time. Claassen’s claim, which he started in June 2022, was made weeks before an independent, sealed bidding process for the sale of Newlands’ development rights reached its deadline.

The claim was subsequently rejected by a heritage committee, which said: “The social memories associated with Newlands and the Newlands Stadium are largely linked to the events that took place at the stadium, as opposed to the actual stadium itself.

“To be clear, the nomination of the Newlands Stadium as a provincial heritage site is rejected, as the site does not possess sufficient architectural, aesthetic, historic, social, associational and contextual significance to meet the requirements of a grade in terms of section 7 (1) of the National Heritage Resources Act.”

Jooste, though, confirmed that there was a pending offer for the sale of Newlands, if they could work through the suspensive conditions in place.

Munnik confirmed that Dream World was aware there was a potential buyer. However, Dream World believes the legal action can run parallel to the negotiations with a potential buyer for Newlands.

“Since I was appointed administrator, we have worked diligently to prevent the foreclosure of Dream World,” Jooste said in an email to Daily Maverick.

“The WPRFU has secured a buyer who has completed their due diligence, and we are currently finalising the legal and contractual aspects of the proposed transaction.

“Throughout this process, Dream World’s representative has been kept informed of our negotiations with the prospective buyer and has received regular updates on our progress.

“Additionally, their representative has met with the prospective buyer and is fully aware of the offer under consideration.

“I want to emphasise that [the] WPRFU remains fully committed to working with Dream World to resolve this situation.

“We are close to finalising this agreement, and it would be a significant setback if we are unable to complete this deal.” DM

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