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Phumelela Gaming and Leisure, which is in financial distress, entered into a voluntary business rescue, the company said on Friday, as the business came under heavy pressure from the suspension of horse racing since the blockade was implemented. from Covid-19.
The company also suspended its JSE shares, but maintains that there is still a “reasonable prospect” of rescuing the business.
He said his board had ruled on Friday that “the best option to ensure the long-term survival of the company and the sport of horse racing is to implement a commercial rescue plan” due to the fact that it was unlikely to pay your creditors. .
“The company has for some time experienced adverse economic and commercial conditions. Its effect has been exacerbated by the national blockade resulting from the Covid-19 pandemic,” it said in a statement.
Phumelela, who was listed on the JSE in 2002, said the industry has not organized career meetings since the closure was implemented, and that retail outlets have closed, preventing it from generating revenue.
The company operates horse racing and totalizing bets in seven provinces. It is the last big business to experience financial difficulties linked to the blockade.
In April, fashion retailer Edcon also announced that the voluntary business bailout would begin as its weak financial position was affected by a lack of business during the shutdown. Phumelela said she had designated John Evans as the commercial rescue practitioner.
Several business associations have stepped up calls for the government to ease Covid-19 restrictions, arguing that a prolonged shutdown of the economy will likely lead to more job losses and bankruptcies.
Since the beginning of May, industries like mining and retail have been allowed to resume operations under strict security regulations, but critics say more sectors need to be opened to avoid an economic catastrophe.
