just reiterating what coolum posted above and what inferno posted in the sharks forum
Sharks ready to roll on $60m redevelopment
BY BRAD FORREST
19/06/2008 10:04:00 AM
THE NEW DEAL
Completed project valuation: $80m-100 million
Debt required: $40m
Value of WBP equity: $40m-60m
Funds raised from public on issue of prospectus:$20m
Shares issued on conversion of notes: $6m
Shares owned by club: $14m-$34m
Shares on issue: $40m-$60m
Ownership of WBP by public: 44-65 per cent
Ownership of WBP by the club: 35-56 per cent
CRONULLA Sharks will secure their future in the National Rugby League competition by floating a separate company to finance a $60 million commercial development around their leagues club.
The Sharks announced yesterday a new commercial arm, Woolooware Bay Properties Limited, would provide a separate income stream and ensure they won't have to move from their home ground, Toyota Stadium.
"It is a win-win situation for the Sharks, raising equity and retaining ownership of the club,'' club chairman Barry Pierce said yesterday. "It has taken a while, but we now have investors ready to fund our redevelopment.''
Unlike Manly and South Sydney, the Sharks have steered clear of privatisation, thus retaining outright ownership of their leagues clubs and football grounds, valued at about $30 million, as well as the football team.
Instead, the new company will be a wholly owned subsidiary of the club, with the Sharks eventually owning between 35 per cent and 56 per cent, after the club lists the company on the stock exchange early next year.
The completed project has value projections of between $80 million and $100 million.
The club's new commercial arm will now set in train the Sharks' long-held plans for the redevelopment since rezoning approval two years ago, thereby setting themselves apart from clubs more reliant on heavily-taxed poker machine revenue.
A hotel/motel and retail and conference centre are among those proposals the Sharks have examined this year to commercialise the 2.8 hectare block of land they own next to their leagues club and football stadium, on Captain Cook Drive at Woolooware.
The Sharks are in equal top position on the NRL ladder.
While the club is trying to increase game-day attendances, under coach Ricky Stuart and new chief executive, Tony Zappia, it has attracted big-name signings in Anthony Tupou and Trent Barrett from 2009.
In recent months, Sharks directors have met with private companies and business chiefs to secure the necessary funding for the new company.
The club-owned land sits on the one major road that sends traffic to Cronulla and Kurnell, off the Captain Cook Bridge.
After the recent housing approval of the large Australand site, between Kurnell and Wanda Beach, the Sharks have become increasingly anxious to get their redevelopment finally up and running, after it stalled over the past couple of years.
Meetings with the State Government and Sutherland Shire Council have been ongoing.
However, securing the necessary backing and funding for the new company was the major hurdle, and this was overcome by the strong show of support Sharks directors received from investors.
In February this year the Sharks estimated the redeveloped car park site would initially be worth about $40 million, with flow-on effects to the leagues and football clubs.
The Sharks are the only NRL club in the state which owns its own football ground and adjacent leagues club, and have had little trouble acquiring backing, with valued assets at around $30 million and debt at $8 million.
But the State Government's increased tax on poker machines, combined with the effects of smoking bans and rising petrol prices, have affected the capacity of clubs to service their debts.
Earlier this year Cronulla completed extensive renovations to the stadium, including the building of a southern stand, after getting a $9.6 million grant from the previous federal government. Club director and managing director of the new company Brett Crowley is meeting investors to raise the first $3 million in convertible notes, with $20 million in shares and bank loans of about $37 million for the $60 million in total funds required for the project.
