Cape Racing has been bought by bookmaking firm Hollywoodbets and GBM Investments, a private equity company headed by leading racehorse owner Greg Bortz.
The complex deal is worth R330-million and will see Bortz installed as executive chairman of Kenilworth Racing, which manages racing in the Western Cape.
The purchase has saved Kenilworth Racing from imminent financial collapse, according to a statement by the trustees of the Thoroughbred Horseracing Trust and directors of Kenilworth Racing Pty Ltd (KR).
The transaction is subject to regulatory approval by various bodies, such as the National Horseracing Authority, the Western Cape Gambling Board and the Competition Commission.
A statement said the trustees and KR had signed an “expression of interest” (EOI) with GMB for the investment company to inject R130-million into KR. About R80-million of this would go towards paying off debt and R50-million would be working capital.
Separately, the trustees had agreed to sell all their shares in KR to Hollywoodbets for “a minimum” of R200-million in cash. A memorandum of understanding (MOU) had been signed and all parties were committed to “work together as swiftly as possible” to complete the purchase.
“As has been publicly disclosed on numerous previous occasions, KR is experiencing sever liquidity and cash flow constraints,” said the statement.
“In short, the current situation is such that, absent immediate action, KR may be forced to imminently cease operations.”
The action taken was to “ensure the long-term viability and health of racing in the Western Cape for the years and decades ahead”.
Hollywoodbets, founded in Durban and now an international betting operation, is already heavily involved in sponsorship of racing in KwaZulu-Natal – with naming rights of the province’s three racecourses and South Africa’s biggest race, the Durban July, which was successfully staged