Trading of Phumelela shares has been suspended since 8 May, when the company was placed in business rescue – a form of bankruptcy protection – that ultimately saw it accept a rescue deal from Mary Oppenheimer Daughters (MOD).
This, in turn, saw creditors reject a ZAR925m (£46.0m/€50.7m/$61.7m) rival takeover bid from British operator Betfred.
The plan set out by MOD will see all of Phumelela’s assets put up for sale, with net proceeds used to repay creditors.
This, Phumelela noted, amounted to “an orderly winding up” of the operator’s affairs, that will leave it with “no business, no assets and no employees”.
Initially there was a suggestion that the business rescue practitioners may have continued to trade its horse racing or Betting World businesses.
The plan always included selling its racetrack business, and its share of the Phumelela Gold International joint venture with Gold Circle.
The company’s chief executive John Stuart and finance director Andreas Heide both resigned when Phumelela filed for business rescue.
While Andrew Langham was appointed interim finance chief, neither position will be permanently filled, with management control resting with the business rescue practitioner John Evans.
As a result, its board of directors is unable to fulfil the role required of it in the JSE Listings Requirements.
It fails to comply with the minimum listing criteria, such as having the ability to control its assets or affairs, or to determine its future.
It will therefore be officially delisted from the JSE on 11 January, 2021.
The MOD offer will see main creditors Rand Merchant Bank (RMB) and Investec receive 100% of money owed.
Other creditors will only ZAR242.0m (72.2%) of the ZAR335.0m owed.
An additional ZAR100m was originally to be made available for shareholders.
This now looks unlikely, however.
“It is not clear at this stage whether, at the end of business rescue, any surplus funds will be available for distribution to shareholders,” the operator said.
“The company will maintain a register of shareholders who will be advised accordingly via the business rescue status reports issued monthly to affected persons.”
The business was already struggling badly after a Gauteng court ruled its joint venture with the state’s Economic Development department to be illegitimate, resulting in a major loss of earnings.
This was then exacerbated by South Africa’s first lockdown as a result of novel coronavirus (Covid-19), prompting management to file for business rescue.
