Dreamworld Investments on Friday officially filed papers in the Western Cape High Court to recover a loan made to WPRFU worth in excess of R112 million.
Dreamworld Investments is an associate company of Flyt Property Investment within the Flyt Group. In June last year, Dreamworld lent the WPRFU R112m in order to service existing debts after the union decided to walk away from the two deals with Remgro and Investec.
At the time, WPRFU president Zelt Marais described the deal with Flyt as ‘the deal of the century’. By the end of 2020, however, the WPRFU reneged on a third signed agreement and are now facing a protracted and expensive legal battle.
Speaking to rugby365, Flyt Property Investment CEO Zane de Decker confirmed that Dreamworld was going to court to recover the loan. The claim is reportedly for the initial loan of R112m, in addition to any interest accruing (estimated to be almost R3m already) and damages totalling R30,156,585.
This may, however, not be the sum of WPRFU’s legal troubles as De Decker confirmed that Flyt may also elect to take legal action.
‘Flyt is also considering its position and is likely to take legal action to recover the damages suffered as a result of WPRFU’s repudiation. With the repudiation, the union should have already paid the money back, but has not. The deadlines for payment have in fact passed.’
The Flyt Group holds bonds over many of WPRFU properties as security against the loan. This places the union in a vulnerable position should judgment be made against it with the union unable to service its debts.
WPRFU president Zelt Marais confirmed he was aware of the court summons but that an official statement would be made in due course.
‘We will be filing the appropriate response. The union elects not to make any further comment at this stage. Its defence will be pleaded in due course.’
Marais’ response indicates that the union will opt to contest the claim brought against it rather than repay the loan. The position of the WPRFU’s legal counsel is that the deal between Flyt and WPRFU is null and void because it was Dreamworld rather than Flyt who acted as lenders. They also claim that the agreement is invalid because the properties were, in their view, undervalued.
In a media release from 10 December 2020, De Decker refuted the notion that this was the case.
‘It is important to point out that the land value agreed on was proposed by the WPRFU, not the Flyt Group. This value has subsequently been incorporated into the Newlands and Brookside DevCo’s that are co-owned by the WPRFU and the Flyt Group.
‘To demand that the price be increased six months after the deal has been concluded is simply outrageous’.