RSL investor speaks out

“I believe that the whole community will benefit from local ownership of the club,” Mr Pauling, of Macquarie Business Accountants who pulled the consortium together, said.

“The club will remain a local institution that is run by the members for the members.”

Combine that rationale with his perspective as an investor and Mr Pauling believes it’s a win-win situation all round.

“The deal offers investors a good rate of return,” he explained

“The major risk is whether the club is a viable tenant and we feel the club would be in an excellent financial position upon us purchasing the Bay Street premises.”

Since revealing the 19-strong consortium’s proposal, much discussion has ensued about the so-called “faceless men”. It has not fazed Mr Pauling.

“Our firm has prided itself on the confidentiality of our client information and would never release any information about our clients’ identities or their financial investments.

“It’s a simple purchase of a building.

“I would like to the point out that no member of the board or past management is a part of the investors, so as to avoid any conflict of interest,” he insisted.

When asked point-blank why the consortium’s proposal was better than that of Panthers, Mr Pauling offered a six-part answer.

“We are purchasing the Bay Street property and have no involvement with the operation of the club.

“The club retains the ownership of the Hibbard property and its assets and will be debt-free as a consequence of the deal.

“The members of the club retain ownership of the club and it is still run by a local board for its members.

“The club profits will be spent on the local members on a strategy developed by local board members.”

As for fears the consortium would “sell off the family farm”, Mr Pauling offered an immediate assurance: “The club has a 10-year lease with a 10-year option.

“This means they have a home for 20 years if they wish.”

THE deliberations about the future of the Port Macquarie RSL Club may be dependent upon the members’ wishes but one institution is bound to play a hugely significant role – the Commonwealth Bank.

As the debate over the future direction of the RSL club spilled over this week, the bank, through corporate affairs manager Paul Rea issued a “background statement” which laid out seven points.

One of the most significant was the last: “If settlement is not reached by 14 November, the bank will consider all remedial options to it.”

It also refuted “any suggestion that it intends to take possession of the club to sell off its assets.

“The bank has made no such decision and it remains our preference that, if possible, the RSL and its members resolve their own future on a timely and decisive basis without intervention by the bank.”

The statement also made mention of a “memo of understanding”, signed by the club and bank in which “the club undertakes to use its best endeavours to tender an agreed sum to the bank no later than November 14, 2001, to discharge the loan facilities.

“This agreed sum represents a significant discount on the existing debt of the club and the bank is prepared to accept this agreed sum from whatever source is approved by the members of the club, on the basis that this amount is paid by the mutually agreed date.”

PORT Macquarie-based MLC John Tingle has thrown his support behind the plan that would see local investors buy the Port Macquarie RSL Club Limited’s Bay Street premises.

Mr Tingle, who raised such a possibility with NSW Treasurer Michael Egan three years ago, said a similar scenario had transpired in Sydney in the 1990s.

“Mr Egan said he knew of a club in Sydney which had been saved only when a small group of local ‘white knights’ got together, raised the necessary finance; bought the club from the lender at a liquidation price and put it back in business,’’ Mr Tingle said.

“Since the club had been relieved of a massive debt, it was able to trade out and repay the rescuers.

“He (Mr Egan) told me he thought that was the very best course Port RSL could follow because apart from saving the club, it would keep it in local ownership.’’

Although nothing eventuated from the proposal at the time, Mr Tingle said he believed a local consortium buying the RSL’s premises was now “the best way to go’’.

“I have been a member of Port RSL since 1987 and I want it to remain in local control,’’ Mr Tingle said.

“I understand that this proposal achieves that, relieves the club of debt and allows it to trade successfully.

“If a local syndicate owns the building and leases it to the club, that does not put the club at a disadvantage.

“I imagine the 19 ‘white knights’ have their reasons for remaining anonymous at present but I can’t see how their anonymity can possibly be seen as anything sinister, or any kind of threat to the Port RSL or its members.

“To the contrary, I believe the Panthers proposal was fraught with problems. One of those was that the State Government was not happy with the proposed merger of dissimilar clubs – a football club merging with an RSL club.

“Because of Panthers’ aggressive takeover programs elsewhere, this could have become a takeover too,’’ Mr Tingle said.

DAVID Meidling is of the opinion that raising the money necessary to secure the future of Port Macquarie RSL Club should be left in the hands of the members.

“I’m a finance merchant banker from way back and there’s nothing magic about raising the sort of funding we’re talking about,” Mr Meidling, a club member for the past 25 years, insisted.

“I hate the thought of losing the club buildings when it’s just not necessary and I just can’t live with the prospect of selling it off to a private group.”

That is principally Mr Meidling’s motivation in becoming embroiled in the RSL finance debate.

The basis of his proposal, about which he has spoken with RSL board chairman Graham Linn, revolves around the members borrowing about $7 million.

“The rest could be raised by debenture issue with a prospectus organised in four to six weeks, at a cost of between $5000 and10,000,” Mr Meidling said. “That not only gives the club enough to pay out the Commonwealth Bank but also enough to give the club a itself a good facelift.”

It is important, he said, for the 14,1000 members to know there is an alternative to the 19-strong consortium supported by the club’s board of directors now that amalgamation with Penrith Panthers is apparently off the agenda.

Although agreeing time was of the essence before the scheduled October 11 meeting, Mr Meidling is of the understanding the Commonwealth Bank has not imposed a strict timeframe.

“I have had discussions with the bank and have been told there is no deadline. If the club keeps to the terms of the workout deed then it could well continue into the future.”

Mr Meidling said he was hoping the board would take sufficient interest in his proposal to allow him to address members at the October meeting.