September 25, 2017

Tinklers bid to buy Newcastle Knights on the rocks

Yeah mate of course I have got the cash. I just don't have it on me right now.

Mining magnate Nathan Tinkler’s bid to buy the Newcastle Knights NRL rugby league club is in disarray because he is unable to front up with the cash in time for today’s handover deadline.

Troy Palmer and Ken Edwards, the chief executive and executive chairman respectively of Tinkler’s Hunter Sports Group, met the Knights board of directors yesterday to seek extra time for the self-made billionaire to fulfill his obligations.

Knights chairman Rob Tew has provided a statement that said “HSG directors Ken Edwards and Troy Palmer this morning advised the board of the Newcastle Knights that HSG is not in a position to complete the transaction by June 30 for a number of reasons, including an inability to pay the existing liabilities as well as an inability to provide a bank guarantee by that date.”

”The Knights board has been told it will be provided with a representation from the HSG regarding their request for an extension of time to complete the transaction, together with detail of when the bank guarantee will be available and liabilities paid. In light of the pressing nature and scale of the existing liabilities, the board of the Newcastle Knights will consider the HSG request with appropriate gravity, once more detail surrounding the timing of the payment of liabilities and provision of the bank guarantee is known.”

HSG assumed control of the Knights’ operations almost immediately after the historic March 31 ballot, at which 97 per cent of members voted in favour of privatisation. The handover was expected to take three to five weeks.

An initial date of completion was agreed for May 31, then deferred until June 30 at HSG’s request. Tinkler has promised to pay out the Knights’ debts, estimated to be worth more than $3.5 million, and provide a bank guarantee for $20m. Palmer said both those pledges could be honoured by August 10. He said there were ”a lot of moving parts” and the complexity of the deal had caused delays.

”Once it is all in place the final exchange of the money will be done, the bank guarantee will be handed over and we’ll have full ownership of the Knights,” he said.

Why is it that when these rich guys step in and take over sporting clubs nothing is ever simple. Do they always have to be that highly geared that there is no spare cash reserves to complete a straight forward transaction?

It is not fair on the fans to keep this dragging on. If Tinkler has the cash then he should front up and stick to the agreed deadlines. It is not good business to keep delaying the takeover. It starts creating doubts and doubts have a habit of creating a momentum of their own.