IT’S over, and we’re set for new beginnings!

Phumelela Gaming and Leisure went into Business Rescue late on Friday afternoon, and a Post Commencement Finance (‘PCF’) deal has been agreed to with Mary Oppenheimer Daughters Pty Ltd (‘MOD’). 

A statement read: “The  financial deterioration of Phumelela Gaming and Leisure (‘PGL’ or ‘the Company’), the largest operator of horseracing in South Africa, has been well documented. The implications of the National Covid-19 lockdown have exacerbated its problems to the extent that today, Friday 8 May, the PGL Board passed a Resolution resolving that the Company go into Business Rescue.

“The decision to opt for Business Rescue was preferred to liquidation because the board of PGL (‘Board’) believe there is a prospect of rescuing the business. The Board took this decision with the knowledge of a Post Commencement Finance (‘PCF’) deal agreed with Mary Oppenheimer Daughters Pty Ltd (‘MOD’). The PCF was offered by MOD subject to several conditions, including the Board making the decision to initiate Business Rescue.

“PGL is central to the operation of the horseracing industry, and the failure of PGL would have a devastating impact on the entire industry. It was for this reason that Charles Savage was mandated by MOD some time ago to engage with PGL. The primary objective was to create a sustainable strategy specifically for horse racing in South Africa.  At different points in time Mike de Kock, David Abery, Wéhann Smith, and Brian Riley have joined Charles in these endeavours.

“In February 2020, Susan Rowett as Chairperson of the National Horseracing Authority called a meeting of several directors and officers of the various industry bodies. In this and subsequent meetings a decision was made to create a Restructuring Task Team (‘RTT’) to engage with PGL with a view of safeguarding, re-capitalizing, and restructuring the racing industry. The RTT comprising the abovementioned individuals were accordingly mandated by MOD and supported by the industry.

“Importantly, none of these individuals, who together comprise the Restructuring Task Team (‘RTT’), are being remunerated for their work. They have offered their skills as they are fully aligned and committed to MOD’s objective as set out above. 

“It is anticipated that the injection of PCF will allow PGL to meet its financial obligations for the duration of the Business Rescue process, importantly including the payment of stakes at levels agreed with the Racing Association during April 2020. Furthermore, the deal provides the RTT with the opportunity to negotiate and work with the Business Rescue Practitioner, and though his office with creditors and other stakeholders, with a view of restructuring and recapitalizing the business, thus ensuring the continuance of a viable horse racing industry.  

“It must be stressed that the opportunity will be short-lived and will rely on all stakeholders having to make significant compromises. Government will be a crucial stakeholder in the future of racing, and while there has been positive engagement, a lot of work remains.

“Many of the negotiations have been and will continue to be subject to non-disclosure agreements. We have been able to ensure payment of stakes, albeit reduced, for the foreseeable future. The RTT will communicate with all stakeholders as and when we are able to do so.”

MEET THE RESTRUCTURING TASK TEAM

RTT Q&A: WHAT HAPPENS NEXT

7 COMMENTS

  1. We should all thank the Oppenheimmers !
    The “MOD’ must make very strict conditions !
    The New Board must go after Wainstein and his cronies,and take steps to recover all the Monies the criminally misused. etc etc
    All the Old Gravy Train Comrades must be fired and will have to re-apply for a Job.
    Is Larry Wainstein completely out of the Picture or is he still active underground or behind the scenes ?
    Why must negotiations be subject to “Non-disclosure Agreements”. Who is hiding What ?
    Any negotiations, should be open and transparent !

    Why can the poor Punters not be involved in the NEW Phumelela ? Something is not quite right !
    What about Agreements with Betting World under others. Where has this Money gone ?

    We all know the PGL Board has been ducking and diving the Week with frenzied selling of shares at whatever price they can get. GET RID OF THEM FIRST !

    • As the CEO of VEla Phumela Investment (Pty Ltd) one of the BEE Shareholders in PGL, on behalf of our Company we commend and thank the Oppenheimer Family for stepping in to save PGL. Let us hope the Restructuring team will produce positive results for all. PGL has been a success flagship in our Country we need to retain it to its former glory.

  2. The reason why phumelela took a knock in the first place was because of a Ceo and board members that had a self interest in phumelela. Phumelela didn’t have enough money in the bank to pay for staff’s salaries before covid 19 lockdown. Covid 19 was just the last blow. Look at phumelela’s share price before lockdown as proof. Previous Ceo’s self interest is primary cause of phumelela’s failure not covid 19

  3. Thank you! The Racing industry is extremely fortunate to have such knowledgeable supporters of the industry spearheading the restructuring of Phumelela. We are very grateful and support you 100%.

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