MVM Holdings could walk away from a potential investment in WP Rugby unless there is a clear willingness to cede majority control.
New York-based businessman Marco Masotti, head of MVM consortium, has shown an expression of interest to invest $6 million (almost R100m) in WP Rugby. Earlier in the week, SARugbymag.co.za reported that Masotti is set to be in Cape Town from 12-17 November, and plans to meet with the likes of WP Rugby president Zelt Marais.
But according to a damning report on the Daily Maverick website, the business consortium is all but ready to abandon the prospective investment unless some decisive answers are provided.
‘Everything Zelt Marais has done through this process is indicative of self-serving interests. He doesn’t care what’s best for the players, the fans, the sponsors and the community, he only cares about one person – and that’s himself,’ said MVM Consortium member Michael Yormark, who is also the president of Roc Nation International’s sports division.
‘This is a joke. Firstly, WP reached out to Marco, not the other way around. He [Marais] is the one that put the current number on the table. He’s the one that stated, “I will give you an exclusive 45-day negotiation window”, yet now he’s telling the media that this American group might not get approval for the process.
‘He’s the one who reached out to us. He and his board approved the exclusive negotiating window, so if he didn’t think that it would get through the system, why did he even go through the process?’
‘WP haven’t even shared due-diligence information that we requested. We have waited for two months for them to share their financials so that we could go through them to clearly understand what the club’s financial position is. They won’t even share that information.
‘The franchise is under-capitalised and it needs professional management. It has a great upside, but it will never reach its potential with the current management structure and current leaders running the show over there.
‘This deal is an equity deal, it’s not a loan. MVM is a very deep-pocketed investment group that has a South African lead investor. We are not only willing to make the purchase, but also to invest significantly more resources in bringing the best talent in the world to run and operate the franchise.
‘MVM also wants to develop an infrastructure that can support the players and which can provide an incredible fan experience in Cape Town and around South Africa. But Zelt won’t listen. He simply won’t listen. The consistent fabrication of the deal structure which has been presented by Marais in the media is frankly just insulting.’
Meanwhile, Marais told Daily Maverick that the ‘WPRFU constitution does not allow it [giving up a controlling interest]’ and that ‘it is also very unlikely that the SA Reserve Bank will approve the export of the WP intellectual property to a foreign jurisdiction’.
“If they’re not happy with $6-million and want ‘X’ then let’s talk. But it’s not about money because WP could’ve come back to Marco months ago and said they wanted $7-million, or whatever. That’s called a negotiation. Zelt is being self-serving and wants to maintain control because he would surely take the $6-million if we only wanted a 49% stake. Because we want majority control, he won’t take the deal.’
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