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Brian Riley – RA President
Following Friday’s announcement of the Phumelela corporate rescue and the emergence of a career restructuring team, questions have been raised.
Like, aren’t they in conflict?
The Directors of the Racing Association should surely be acting for their members and owners in the first place.
They approved a gambling bailout to help Phumelela and are now the bridge between cash investment and the faltering operator, while representing the best interests of vulnerable stakeholders. Can they really lie on so many beds and wear so many hats?
Turf Talk put the Racing Restructuring Team (RTT) under the chairmanship of Brian Riley to answer questions about Phumelela Business Rescue, Post-Startup Financing, continued involvement of RA directors, and the immediate future of racing .
Meet the team – click here
- Q: Who are you / why are you doing this?
A: Mary Oppenheimer Daughters (MOD) refers to the family office of Mary Slack (nee Oppenheimer) and her four daughters. MOD provides a range of services to the family and its various interests. MOD participates to protect, secure and promote the interests of all those interested in racing through the restructuring, transformation and recapitalization of the horse racing industry.
- Q: What is post-start financing? (PCF)
A: PCF is financing provided to a company once the commercial rescue procedures have begun.
- Q: Will PGL survive the trade bailout? Not many companies do it. What makes this situation different or is this the beginning of the end?
A: Post-start financing allows enough time for the business rescue professional and stakeholders to negotiate a suitable agreement. Many companies that enter Business Rescue do not receive such financing.
- Q: What is the difference between the old PGL and the new one in Business Rescue?
A: PGL affairs will be overseen by a business rescue professional with experience working with financially distressed parties, their creditors, and other interested parties.
- Q: If we don’t run for another month or two, will PGL run out of money?
A: It is anticipated that the funds provided will be sufficient for PGL to continue operations for a short period. However, the sooner we race here and around the world, the better for everyone in the industry.
- Q: Have Covid-19 and governments come up to it?
A: Zero revenue in recent weeks has certainly brought the industry to its knees and in the case of PGL it probably precipitated a Business Bailout.
- Q: How does this affect the racing and racing industry?
A: For now, when the government allows it, the races are expected to continue with PGL continuing to operate Business Rescue.
- Q: What are the consequences for the betting agreement?
A: Bets will still be paid under PCF status at levels previously agreed by PGL until the end of the season. A new betting agreement will be negotiated.
- Q: Does this have government support? Have you contacted the government?
A: There has been some compromise and from meetings with various government departments it seems likely that a master plan for the industry will be agreed.
- Q: Will you buy the race tracks again?
A: A potential transaction is still in its infancy. We cannot comment at this stage, however, career courses must be ensured for the sustainability of the sport.
- Q: Is transformation taken into account in negotiations?
A: It is certainly planned at this stage.
- Q: How long before a deal is made?
A: A minimum of 3 months and probably more.
- Q: Will we be updated regularly?
A: Negotiations are generally concluded under a Non-Disclosure Agreement and therefore, until an agreement is reached (or not), very little can be shared. Unfortunately, these things take time and patience is required.
- Q: Are the directors of the Career Association in conflict when offering advice to MOD?
A: Legal advice is believed not. They are acting without financial consideration, in the interest of the horse racing industry and with the full support of past and current Racing Association Boards, as well as other leading industry bodies. However, should a conflict arise at any time, appropriate steps will be taken to ensure that the parties to the conflict are excluded from negotiations and decisions.
