The expected auction of the Arlington racecourse comes after South Africa’s largest horse racing and tote betting operator was placed under business rescue on May 8 last year.
PHUMELELA Gaming and Leisure is set to lose one of its prized assets, the Arlington racecourse in Gqeberha, formerly known as Port Elizabeth, when it is put up for auction on April 23.
It will be the country’s first horse racing track to go under the auctioneer’s hammer.
The 62-hectare property in Walmer has been described by Broll Auctions as the developer’s dream as it is the last large piece of land within the hub of the main city, less than 10 minutes from the airport, and making it ideal for residential estate development or an industrial park.
The expected auction of the Arlington racecourse comes after South Africa’s largest horse racing and tote betting operator was placed under business rescue on May 8 last year in accordance with chapter 6 of the Companies Act.
Ish Hendricks, a group auctioneer at Broll Auctions, said the Arlington racecourse auction presents “once-ina-lifetime opportunity for any developer”.
“It is a unique opportunity for any developer and we have received so many enquiries from residential and industrial developers throughout the country, including from JSE-listed companies. I think this boils down to how unique this opportunity is, and the significant upside of a completed development in a great countryside setting,” Hendricks said.
Phumelela has been battling for survival since Public Protector Busisiwe Mkhwebane found the 1997 memorandum of understanding 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 from the end of March last year.
However, the 70-year-old Arlington racecourse held its last race in 2013.
Phumelela’s last set of results revealed a dire situation as losses from operations for the six months to end January 2020 widened to R93.5 million, with local operations recording a combined loss of R115.1m, but its international operations remained profitable.
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.
Broll Auctions said the adopted business rescue plan provided for the sale of all the company’s assets and payments of the net proceeds generated to creditors in terms of the provisions of the Companies Act.
In November last year the group announced that its business rescue practitioner had paid a total of R110.1m to its creditors in October, with R27.8m paid to its secured creditors, while R82.4m was paid to Post Commencement Finance creditors.
The final nail in Phumelela’s operations came in December when the JSE informed the company that its shares would be removed from the bourse in mid-January after listing in 2002.
Phumelela was founded in 1997.
– BUSINESS REPORT
