Steelers owe St.George $8.29
million

When the St.George-Illawarra Dragons don the jersey of the Illawarra Steelers in round 6 at Wollongong, the Dragons will be commemorating a Club that has a hefty financial debt with the St.George Leagues Club.

The Illawarra District RLFC, a 50% stakeholder in the St.George-Illawarra joint venture, officially owes the St.George Leagues Club 8.29 million dollars. The Illawarra Steelers, who were facing financial issues at the end of the 1998 season, will be struggling for their immediate survival when the NSW Government's new poker machine tax is introduced on September 1.

The information regarding Illawarra's sizeable debt is contained in the full financial report of the St.George Leagues Club Ltd, for the financial year ending 31 October 2003. The concise financial statements that were issued to members only reveal that the Steelers borrowed an additional 2.85 million dollars from St.George in the 2003 financial year.

The issue was brought to light at the 49th Annual General Meeting of the St.George Leagues Club. Following a series of questions, St.George General Manager Danny Robinson confirmed that St.George have a registered, secure mortgage over the Steelers Club, an asset which is valued at approximately 16 million dollars. If Illawarra are unable to meet their financial commitments in the future, St.George could sell or take full possession of the Steelers' Club.

It was also revealed that due to the structure of the loan, Illawarra is only paying $57,000 in interest payments rather than $454,300 that could be charged. Due to the precarious state of Illawarra's finances, interest of 5.48% is being charged on just 1.04 million of the 8.29 million dollars. The non-interest bearing component of the loan could net St.George an additional $397,300 per annum if the same interest rate was applied to this component. Nonetheless, Mr Robinson remarked that Illawarra would be unable to meet its financial commitments if interest was applied to the full amount of the loan.

Robinson stated that there is a program in place for the full amount of the loan to become interest bearing, and that he would outline the specific details at a later date. In addition, Robinson declared that he would provide additional information on the date that the loan needs to be paid back by and what amount Illawarra has financially contributed to the St.George-Illawarra joint venture since its formation.

From the statements made at the AGM, it appears that the St.George Leagues Club have lent the 8.29 million to Illawarra to strengthen the position of the Steelers' licensed club which was in dire need of development. Despite this, Illawarra have reportedly used some of the loan from St.George towards funding the costs of being a partner in the Dragons' joint venture. Through the improvements to the Steelers' club, which have been made possible as a result of the concessional loan, Illawarra hope that "one day" they may be in a position to equal St.George's annual contribution to the joint venture. Current estimates suggest that St.George is funding at least 85% of the contributions that the 2 Clubs make towards the merged entity.

In other news, R2K has contacted St.George DRLFC Chairman Peter Black for an update on the permanent lighting issue at Oki Jubilee Stadium. Musco Lighting, a specialist in community friendly sports lighting, had previously informed R2K that the installation of permanent lights would cost between 500,000 and 700,000 dollars.