Phumelela Gets New Rescue Bid from UK Bookie, Betfred
In an interesting new twist to the beleaguered Phumelela saga, there’s a new player in the game. The British gambling operator, Betfred, has publicly stated that it will pay up to ZAR 925 million to obtain all of the South African racing operator’s assets.
Phumelela’s creditors will now have to decide whether they want to go with Betfred’s offer, or vote in favour of the business rescue plan put forward by Phumelela.
The rescue plan will see Phumelela sell some but not all of its assets to one of its largest creditors, Mary Oppenheimer Daughters (MOD). The MOD plan includes taking over the horse racing business and several other assets.
Betfred’s offer, however, entails buying the entire company.
MOD has already put up an R100 million emergency fund to settle some of Phumelela’s immediate debts.
Both MOD and Betfred have said that none of Phumelala’s employees will be negatively affected by the sales.
One of the main differences is that while the business plan makes accommodation for creditors to claim 72% of the money due to them, Betfred said that its deal would “result in all creditors being paid 100% of their claims.”
Betfred said that, in the face of a challenging global and domestic environment, its offer represents a vote of confidence in the South African economy. The group said that the offer was also a direct response to President Cyril Ramaphosa’s drive to boost the country’s economy by securing billions in foreign investment by 2023.
“The investment by an experienced multinational corporation into South Africa is likely to result in enhanced growth and opportunities for South Africa, as well as the transfer of skills and knowledge to local employees,” said Betfred in its offer. “This investment should not only be beneficial to Phumelela’s creditors and other stakeholders but also to horseracing and betting and South African society in general.”
Phumelala’s creditors are due to vote on the proposed rescue plan by September 1st. It requires 75% of the creditors to vote in favor for the plan to pass.
Betfred has given the creditors until September 1st to accept or reject its alternative offer, after which time, the offer will be revoked.