Betfred’s offer to acquire South African Phumelela Gaming & Leisure has been rejected by the South African racing operator’s creditors. The UK-based firm proposed to buy the company for a deal worth up to ZAR925m ($55.2m), as well as a ZAR650m loan, which would have been used by Phumelela to pay off its significant debts.
Phumelela’s creditors voted in favor of a business rescue plan by Mary Oppenheimer Daughters (MOD), a private investment fund of Mary Oppenheimer-Slack and her daughter Jessica Jell, members of one of the richest families in South Africa. Some sources claim there was also an intention to keep the company local, which gave MOD a great advantage.
According to creditors, Betfred’s proposal was financially more attractive than MOD’s but was also purely speculative without any commitment to follow through. The total value of the MOD’s business rescue plan is expected to reach ZAR920m, with creditors to receive a minimum guarantee of 72%, less than the 100% Betfred had promised.
Oppenheimer’s fund has already supplied the racing operator with a ZAR100m loan at the beginning of the COVID-19 pandemic, and will also launch a ‘post-conflict-fund’ of ZAR550m, guaranteeing a payment plan for the company’s existing creditors.