THE Knights Members Club has granted Nathan Tinkler’s Hunter Sports Group extra time to finalise an audit of Newcastle’s NRL flagship after HSG agreed to extend the $20million bank guarantee that underpins the privatisation agreement.
Knights CEO Matt Gidley and HSG representatives met with members club directors late yesterday to discuss critical dates pertaining to the audit report, due to be presented on Saturday, and the bank guarantee.
HSG had sought to postpone the audit reporting date to February 15 but the members club would not agree to that unless HSG extended the terms of the $20million bond until March.
The Newcastle Herald has been told an agreement in principle was reached yesterday in which HSG will now present their review of 2012 financial operations on January 21.
In return, HSG agreed to extend the $20million bank guarantee until January 31.
That surety was to revert to $10.3million on January 1, according to the terms of the ownership agreement signed on August 5 last year, but will now decrease on January 31.
Had HSG not confirmed they would provide an audit by an agreed date, or had not extended the bank guarantee, the members club board would have been within its rights to initiate a process to take control of the Knights and end Tinkler’s ownership of the rugby league club.
Gidley and Knights Members Club chairman Nick Dan are expected to make a joint statement today outlining details of the compromise, which will allow the members club 10 days next month to review the audit figures and access to the $20million to make up any shortfall.
‘‘We had a very positive discussion tonight with the members club board and we look forward to making a joint statement some time tomorrow afternoon,’’ Gidley said last night.
Dan, in Sydney this week representing former NSW Mining Minister Ian MacDonald at an ICAC inquiry, participated in the meeting late yesterday via telephone.
‘‘There was a productive meeting this afternoon between some representatives of the Hunter Sports Group and the Knights Members Club board, where some issues in dispute were discussed,’’ Dan said last night.
‘‘An agreement was reached in principle, with those points to be reduced to writing with further details to be released tomorrow afternoon, hopefully.’’
According to the August 5 deed of sale, HSG guaranteed to provide $10million worth of sponsorship, sufficient working capital for day-to-day football and administrative operations, $2.5million for junior development, and $300,000 to the Newcastle Rugby League.
It is understood the audit began yesterday, and the compromise reached has bought HSG an extra five weeks to complete this process.
The members club board will then have a 10-day window to ascertain whether HSG has upheld the key elements of the privatisation agreement, and how much of the $20million needs to be used to make up any deficit in sponsorship, funding, or development grants.
The Herald has been told Knights players have been unaffected by the latest wrangle between HSG and the members club.