Online Reporter
New Royal AM owners will need deep pockets in the first few months as they start off with a multimillion debt book, leading to the likelihood of needing up to R65m to run the club in their first month in charge.
This is according to a financial expert.
Bids to take over the South Africa KwaZulu-Natal-based Premiership football club will open on Friday, with potential buyers invited to pay a deposit of R1m. The winning bidder will then be informed by March 17.
According to the draft sale agreement, the purchasers will have to inherit all of Royal’s debt, and this is where Nqobile Ndlovu, of Cash and Sport, feels the purchase price could go south for the investors due to the club’s recent travails.
“There has been speculation that the club would be sold for R15m. However, the true reflection of Royal AM’s worth could be R30m, given that they owe former player Samir Nurkovic R15m,” Ndlovu told Sowetan.
“They could also be owing salaries and costs associated with running a football club, like travel, accommodation and other personnel, making the amount balloon by a further R45m to R50m. I would say in the first month alone, the buyers would need at least R65m to run the club.”
The draft sale agreement, which was circulated yesterday by Royal’s curator Willem Venter, states clearly the new buyer will have to take over all debt associated with the club. “The purchaser is responsible for and will deal with any, and all, claims or matters that may exist or which have been or which are brought by or against the club (whether by or in respect of the League, players, other participants in football, or third parties) and whether before a disciplinary committee; dispute resolution chamber; or any other football or sports tribunal or court,” the draft reads.
“The purchaser shall pay all and any salaries, signing-on fees, image right payments, bonuses, leave pay and/or other benefits due or accrued, to the professional football players.”
This means Royal players and staff, who have experienced payment delays since December, will have a legitimate claim against the new owners.
The biggest sticking point, however, remains the club’s outstanding fixtures as they have not played a match this year. They are behind by nine games and playing catch up seems a daunting task, although the draft sale agreement is silent on that aspect. It merely mentions that the owners will have to comply with the PSL programme upon approval of the sale, which, if accepted by the curator, will have to be ratified by the league’s executive committee.
Apart from Nurkovic, six other players have lodged claims against Royal, seeking early termination of contracts. The new owner will also have to accept the transfer ban imposed by Fifa on the club two years ago. It can only be lifted once Nurkovic has been paid. – additional reporting by Nkareng Matshe. (SowetanLIVE)
