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Struggling Steelers offered $2.6M lifeline
The struggling Steelers club look likely to sell 20 percent of their property for $2.6 million to WIN Corporation owners Bruce and Andrew Gordon, a deal designed to bail the Steelers out of debts owed to the St George Leagues Club.
Steelers Club members will have the opportunity to vote at an Extraordinary General Meeting on October 27. It's understood the Steelers board will be endorsing the sale.
Steelers board chairman and Clubs NSW president Peter Newell said the sale would allow the Steelers to pay off an outstanding balance of $2.6 million to St George.
"We have been carrying that debt until now, but with the dramas besetting the registered club industry statewide at the moment - with the increase in gaming machine tax, the downturn in club revenues after the introduction of the complete indoor smoking ban, and the economy generally - we have an obligation to repay that money to St George and that is not unreasonable," Mr Newell said.
The initial loan in 1999 was $8.2 million and was part of joint venture agreement between the two clubs. The Steelers were able to repay $6.5 million to St George in 2006, but only after the Steelers sold off approximately half of their 50% share - in the St George Illawarra Dragons joint venture - to billionaire Bruce Gordon's WIN Corporation. As part of that deal, Bruce's son, Andrew Gordon secured one of the Steelers' four board positions with the joint venture.
The Steelers Club also reached an agreement with WIN Corp to provide funding for its $350,000 debt to the St George District Rugby League Football Club Limited in 2006.
In the 2006-2007 financial year, the Steelers club reported a loss of $962,169 compared to a loss of $22,341 in the previous financial year.
But Mr Newell said a new business and marketing strategy had turned around the club's fortunes since February.
"We have traded profitably for the last six or seven months now," Mr Newell said.
"We haven't been going gangbusters but it has been a very pleasing turnaround ... we would like to think we have turned a corner."
According to the 2007 annual report, the club's property, plant and equipment was valued at $14,931,618.