Betfred loses out on purchase of Phumelela Gaming and Leisure Limited

South African horse racing and betting operator Phumelela Gaming and Leisure Limited has reportedly turned down a lucrative deal that would have seen British bookmaker Betfred buy its entire business for about $55.6 million.

According to a brief report obtained from betting companies in South Africa, the Johannesburg-based company chose to accept an earlier offer from one of its biggest lenders, private investor Mary Oppenheimer Daughters, which involves receiving just over $28.8 million in exchange for its assets and a large stake in local company Phumelela Gold International Limited.

Significant commitments:

Gambling Insider reports that the bailout deal could end up costing Mary Oppenheimer Daughters $55.3 million, with the London-based investment firm already lending Phumelela Gaming and Leisure Limited about $6 million. The source said the plan also guarantees that the South African company's current lenders will receive a minimum of $33 million, a 72% guarantee compared to the full guarantee previously promised to Betfred.

Coronavirus Annulment:

Phumelela Gaming and Leisure Limited is responsible for four racetracks in South Africa, including the prestigious Turffontein Racecourse, but is reportedly struggling to cope with a debt of more than $36 million and the recent suspension of the domestic racing calendar related to the coronavirus. Betfred, which is headed by British billionaire businessman Fred Dawn (pictured), had allegedly previously offered a $39 million loan to the beleaguered operator, which was to be used to cover a significant deficit.