End of the race as Phumelela Gaming and Leisure is forced off the JSE
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DURBAN - It is an end of a racing era for Phumelela Gaming and Leisure, which said on Friday that it had been informed by the JSE that its shares will be removed from the bourse from January 11, nearly eight months since its shares were suspended for trading.
This comes after South Africa’s largest horse racing and tote betting operator’s board placed the company in business rescue in accordance with chapter 6 of the Companies Act on May 8.
Phumelela was founded in 1997 and listed on the JSE in 2002.
The group has been struggling since the public protector Busisiwe Mkhwebane found the 1997 memorandum of understanding (MoU) between the Gauteng Economic Development department and the Gauteng Horse Racing Industry to be illegitimate.
The 2019 report also recommended the withholding of Phumelela’s 50 percent share of the 6 percent levy on punters’ winnings on fixed-odd bets on horse racing in Gauteng.
Phumelela was also hurt by the nationwide lockdown as it was not able to hold race meetings.
In its results for the six months to end January, the group widened its losses from operations to R93.5 million, with local operations recording a combined loss of R115.1m, but its international operations remained profitable during the period.
The company filed for a business rescue plan, which was published on August 18 and adopted at the beginning of September and John Evans was appointed as business rescue practitioner.
The group said the adopted business rescue plan provides for the sale or realisation of all the company’s assets and payments of the net proceeds generated to creditors in terms of the provisions of the Companies Act.
“Implementation of the business rescue plan is in effect an orderly winding up of the affairs of Phumelela and at the end of the business rescue process, Phumelela will have no business, no assets and no employees,” the group said.
Evans announced last month that the company paid a total of R110.1m to its creditors in October.
In May chief executive John Stuart stepped down from his role before the commencement of business rescue proceedings in August.
The group said the management control of the company was transferred to the business rescue practitioner and the board is unable to fulfil its role as envisaged in the JSE listings requirements.
“Phumelela, therefore, does not meet certain of the minimum main board listing criteria, including the financial requirements pertaining to assets and profitability and the ability of the issuer to control its assets and affairs or to determine its future,” the group said.
The group added that it was not clear at this stage whether, at the end of business rescue, any surplus funds would be available for distribution to shareholders.
“The company will maintain a register of shareholders who will be advised accordingly through the business rescue status reports issued monthly to affected persons,” the group said.