Turf Talk Newsletter – 5 July 2022

Press Release:

The trustees of The Thoroughbred Horseracing Trust (the “Trust”) and the board of directors of Kenilworth Racing Pty Ltd (“KR”) (collectively, the “Trustees and KR Board”) would like to inform all stakeholders of certain proposed transactions that will have a significant impact on the future of racing in the Western Cape.

As has been publicly disclosed on numerous previous occasions, KR is experiencing severe liquidity and cash flow constraints. In short, the current situation is such that, absent immediate action, KR may be forced to imminently cease operations. In light of these critical issues, the Trustees and KR Board have been working tirelessly to identify immediate and sustainable sources of liquidity to enable racing to continue in the near term, as well as solutions to ensure the long-term viability and health of racing in the Western Cape for the years and decades ahead.

To that end, the Trustees and KR Board are pleased to announce certain developments that are intended to achieve those objectives. First, the board of KR has approved and counter-signed an expression of interest (EOI) with GMB Investments (Pty) Ltd (“GMB”), a company represented by Cape Town based owner Gregory Bortz.

This EOI provides that GMB, upon receipt of the necessary regulatory approvals and subject to certain closing conditions, will provide an immediate R130 million of liquidity to KR in the form of:

(i) The granting of a R50 million working capital facility to KR; and

(ii) The repayment of approximately R80 million in indebtedness owing by KR to its current lender.

In addition to the normal and customary terms typical of such financing arrangements, GMB will receive an option from KR to subscribe for an equity stake in KR exercisable upon a change of control transaction at KR (the “GMB Option”).

Separately, the trustees of the Trust have counter-signed a Memorandum of Understanding with Hollywood Sportsbook Holdings (Pty) Ltd (“Hollywoodbets”) for the purchase of all the Trust’s shares and claims in KR (the “Hollywoodbets transaction”). Hollywoodbets has agreed to make a minimum of R200 million cash infusion into KR pursuant to the successful closing of the Hollywoodbets transaction.

The parties intend to work together as swiftly as possible to proceed from the MOU phase to the execution of definitive purchase and sale documentation. Closing of these transactions will be subject to various approvals including but not limited to The National Horseracing Authority of Southern Africa (“NHRA”), The Western Cape Gambling and Racing Board (“WCGRB”) as well as The Competition Authorities. These regulatory approvals may take significant time to complete.

Upon the ultimate closing of the Hollywoodbets transaction, and upon the exercise of the GMB Option, there will be two shareholders in KR – namely Hollywoodbets and GMB.

In signing the EOI and the MOU, the Trustees and KR Board sought an enduring solution for Cape Racing that ringfenced the Cape’s crown jewel, Kenilworth Racecourse. We are pleased to announce that the MOU contains (in addition to the very sizable cash injection into KR) a provision for the ringfencing of Kenilworth Racecourse.

Hollywoodbets has already shown its commitment to horseracing in South Africa through its extensive racehorse ownership and sponsorship, and remains steadfastly focused on continuing to promote and give back to the sport it is so passionate about. Hollywoodbets’ involvement will ensure that thousands of jobs in and around the horseracing industry are maintained and secured. In addition, Hollywoodbets importantly holds a Broad-based Black Economic Empowerment Level 3 status. Furthermore, its devotion to providing outstanding customer service will invariably assist KR in providing the best possible owner and punter experience in the province.

We are further delighted at the prospect of having Greg Bortz’s involvement following the implementation of the transaction – not simply in terms of his capital, but in terms of his time and expertise. In addition to being a substantial and passionate owner in South Africa, Mr. Bortz’s professional background involved investing in and restructuring operationally and financially challenged businesses. We believe his turnaround expertise and guidance, coupled with his passion for and knowledge of horseracing, will assist the board in returning KR to the status it deserves. Post-closing of the Hollywoodbets transaction and the exercise of the GMB Option, it is anticipated that Mr. Bortz will serve as Executive Chairman of KR.

As stated previously in this release, changes to the ownership and board in KR are dependent upon the receipt of the prerequisite regulatory and other approvals. We are unable to estimate the timing thereof. In the interim, the GMB financing will enable KR to continue its racing operations with an eye to exciting developments upon the closing of both transactions.

We would like to specifically acknowledge the prior support of Mary Slack and her family who for a period of over two years has assisted KR through significant liquidity hurdles, and for which we are most grateful.

While the new ownership and leadership can only commence once all regulatory approvals and conditions have been met, we are excited about what lies ahead once the new team assumes the helm. Most importantly, we are extremely pleased that the future and sustainability of horseracing in the Western Cape has been secured for generations to come.

The Trust and KR will be providing regular update announcements as further pertinent information becomes available.

ENDS

Despite only finishing fourth in Saturdays Grade 1 Brentford F.C. Garden Province Stakes, Captain’s Ransom clung onto her lead at the top of the Horse of The Year table.

Sparkling Water, after her runaway Hollywoodbets Durban July win, enters the table for the first time, only one point adrift of Captain’s Ransom, and this places two fillies at the top of the Horse of The Year table with four weeks to season end.

Jet Dark, following his second place in the July, is just off the pace, four points below Captain’s Ransom. The only other mover on the table was Safe Passage, third in the July, while MK’s Pride fell from the top seven.

The Grade 1 Champions Cup at month end may well decide which horse tops the Horse of The Year Table this season. The winner will accumulate an extra 48 points towards the table.

Captain’s Ransom heads the table on 108 points, followed by Sparkling Water (107), Jet Dark (104), Safe Passage (90), Rain In Holland (86), and both Kommetdieding and Pomp and Power on 84 points.

Champion Three-Year-Old Colt

Apart from their participation in the Hollywoodbets Durban July there was little action in the three-year-old male category this month. Safe Passage moved to the top of the table after his third in the July, while Pomp and Power, Aragosta and Master Archie were unable to add to their June points tallies.

Safe Passage heads the table on 90 points followed by Pomp and Power (84), Aragosta (52), Master Archie (48) and Double Superlative (46).

Champion Three-Year-Old Filly

There was no change to the Champion Three-Year-Old filly table this month. Rain in Holland (86 points) remains on top followed by Chansonette (72), Big Burn (54), Under Your Spell (45) and Sprinkles (42).

Champion Older Male and Female

Jet Dark (104 points) moved back to the top of the Champion Older Male category and now holds a large lead over his closest rivals, Kommetdieding (84), MK’s Pride (83), Al Muthana and Astrix on 68 points. Al Muthana is a new entrant to the table after his first Grade 1 win in the Hollywoodbets Gold Challenge in June.

Captain’s Ransom (108) holds onto her lead by a slender one-point over Sparkling Water (107). She’s A Keeper (32 points) enters the table for the first time after her first Grade 1 success in the Jonsson Workwear Garden Province Stakes. Likewise, Marina (32) enters the table off a second in the same race while Princess Calla (52) remains on the table.

Distance Categories

There was no change to the Champion Sprinter table this month with Alesian Chief (45 points) still on top, followed by Master Archie and Bohica (both on 40 points), Big Burn (36) and Captain’s Ransom (32).

The Grade 1 Mercury Sprint at month end could well decide which horse finishes on top of this closely contested category.

The result of the Grade 1 Hollywoodbets Gold Challenge dictated the changes to the Champion Miler table this month. While MK’s Pride finished fourth in that race he remains on top with 83 points. The winner of the Gold Challenge, Al Muthana (68) enters the table for the first time, followed by Gold Challenge third, Jet Dark (60), Princess Calla (48) and Captain’s Ransom (44).

With her win in the July Sparkling Water has leapt to the top of the Champion Middle Distance table. She leads with 79 points, followed by Astrix (54), Kommetdieding (48), Jet Dark (44), and Flying Carpet (38).

Black Thorn displaced Nebraas and Sparkling Water at the top of the Champion Stayers table after his win in Saturday’s Grade 3 DSTV Gold Vase. He leads the table on 21 points followed by Sparkling Water and Nebraas (both on 20 points), and new entrants Pink Tourmaline (16) and Salvator Mundi (11).

Champion Two-Year-Old Colt and Filly

Thunderstruck remains on top of the colt’s category with 32 points, while Saturday’s Grade 2 Golden Horseshoe winner Cousin Casey (24) is in pursuit. They are followed by Now I Got You, Karangetang and Prophet (all on 16 points).

Despite finishing unplaced in Saturday’s Grade 2 Golden Slipper, Sweet Pepper remains in the lead in the filly’s category on 32 points.

The winner of that race, Ameena (24) is second followed by Glittering Girl, Maharanee and Miss Cool (all on 16 points).

Note: Points log will determine one-third of the final award in each category, with an expert panel and a public vote each accounting for another third of the final vote. Only horses included in the final points log will be voted on by the expert panel and public. The final awards in each category will be announced on 24 August 2022.

Equus Awards 2022 – Points Tables to 2 July 2022