UK-based betting company Betfred is aiming to expand into the South African market with a proposal to purchase the financially troubled racing organization Phumelela for $54.8 million.
This acquisition would give Betfred ownership of all Phumelela’s holdings. The transaction would begin with a payment of $48.3 million, followed by an additional $6.5 million contingent upon Phumelela’s racing operations achieving predetermined performance benchmarks.
In an effort to make the offer more appealing, Betfred has also proposed lending Phumelela $35.9 million in two separate payments to assist in settling outstanding liabilities. The initial installment of $13.8 million would be disbursed within five days of the recovery plan’s ratification.
Phumelela has a deadline of September 1st to either accept or decline the offer. Betfred has pledged to protect all employment positions and holdings should the agreement be finalized, with the objective of revitalizing South African horse racing.
Betfred views this potential acquisition as a chance to penetrate a new market, gain insights from established practices, and make a positive contribution to the South African economy.
Earlier this year, Phumelela was compelled to disclose a business rescue strategy after the COVID-19 pandemic resulted in over $33 million in debt.
The South African enterprise, Mary Oppenheimer Daughters (MOD), which seeks to acquire a horse racing management company, is in high demand. Recently, the bookmaking firm Betfred has entered the contest to purchase the business.