The unfolding tale of an exciting new era in Western Cape racing reached another landmark earlier this week when the Competition Commission of South Africa announced that it has recommended that the Competition Tribunal approve the proposed transaction whereby the Hollywood Group intends to acquire Kenilworth from the Thoroughbred Horseracing Trust.
In a deal that effectively saved Kenilworth Racing from hitting a brick wall, Cape Racing was bought by bookmaking firm Hollywoodbets and GBM Investments, a private equity company headed by leading racehorse owner Greg Bortz.
Just this week, Bortz confirmed that he now also owns 53.65% of Grand Parade Investments (GPI), which was started as an empowerment gaming company and BEE partner to Sun International.
The entrepeneur told the Sporting Post that Grand Parade is a part owner of the two best gaming assets in South Africa (GrandWest Casino and Grand Slots).
“Grand Parade’s exposure to these assets was ‘obscured’ by its food investments. Now that Grand Parade has returned to its roots as a pure play gaming business, I am expecting strong cash flow and profitability going forward. We intend to continually explore how best to utilize this cash flow to maximise shareholder returns. And of course, this includes investigating any mutually synergistic opportunities that may exist between Grand Parade and horseracing in the Cape. For now, we are keeping an open mind and moving as fast as we can,” he said.
The Cape Racing deal is the subject of the Competition Commission process and is worth R330-million. It will see the energetic Bortz installed as executive chairman of Kenilworth Racing, which manages racing in the Western Cape.
The purchase saved Kenilworth Racing from financial collapse, according to a statement by the trustees of the Thoroughbred Horseracing Trust and directors of Kenilworth Racing Pty Ltd.
Reports indicate that the trustees and Kenilworth Racing had signed an ‘expression of interest’ with GMB for the investment company to inject R130-million into Kenilworth Racing. About R80-million of this went towards paying off debt and R50-million would be working capital.
Separately, the trustees had agreed to sell all their shares in Kenilworth Racing to Hollywoodbets for a minimum of R200-million in cash. A memorandum of understanding was signed and all parties were committed to co-operating to complete the purchase.
The action taken was to ensure the long-term viability and health of racing in the Western Cape for the years and decades ahead.