Possible Liquidation

"Possible Liquidation"

I am borrowing from Oscar's post from the thread: "Phumelela - shareholder, stakeholder communication"

oscar wrote: The question is, are they willing to take the risk that racing and gambling then via the tote shuts down completely and they will get zero out of it except strikes, protests and mayhem or are they more willing to discuss and come to a compromise which benefits all parties? (1)

I am in no way supporting what Phumelela did as regards the dividends pumped out of racing, that should have been handled a long time ago when we were all complaining. (2)

If it collapses and horse racing stops (it must be a possibility otherwise this kind of press release would not have been made) then who stands responsible for the collapse and the tragic consequences that will follow? (3)

(1) Running off to the government is not the parachute you should be hoping for when you pull out the reserve 'chute.

(2) For most of the time, the owners (RA) held 33% of the shares. Owners also had the steering wheel at Phumelela, and when last I looked owned most of the balance of the 66%. There can be no pretending shock and horror surprise. This shit is becoming real, and there is some business rule about only being able to kick the can so far down the road till it gets stuck or something.

(3) It looks more like "when" it collapses rather than "if". Do public companies ever use phrases like "possible liquidation" unless there really is a wolf, or is high drama a thing on the JSE now? And when you say "who stands responsible for the collapse ", does it matter? How much energy do we want to spend on woulda/coulda/shoulda? There are never direct consequences so just move on and try to learn the lesson.

I think everyone should be contemplating what the plan should be, could be, if/when Phumelela goes bankrupt. Is everyone relying on the multi-million Rand salary earners to MacGyver a resue with two paper clips and a stapler? I hope not.

Oscar started with "The question is...." The question is what s the post-apocalypse plan? Bearing in mind the irony that we only need that plan because we never had a pre-apocalypse plan.

After stealing the ideas from smart people, this is my best proposal:

Right now, the fragmented racing "industry" co-owns a national tote. Private ownership of racing's assets has proven to be a failure. First, it was almost captured or was captured, and now is astonishingly close to being lost, broken up and swallowed, or as Phumelela shockingly put it "possible liquidation".

The essential assets of racing, irreplaceable tracks etc, need to be held in a non- profit trust of sorts for the benefit of everyone. We need a National Racing organisation, exactly like we needed the tote to go national when it did, and we need those assets protected from capturers and asset-strippers. From there you can let the free market balance supply and demand of everything else.

Can Phumelela be de-listed? In the space of one-year shares have been R14.90 and R1.49, and a few weeks ago Business Day reported a 15-year low. My guess then it has never been cheaper than now to de-list. Smarter people than I need to work out if de-listing is feasible.

We have to imagine what we want to achieve now and in the next 5, 10 or 20 years, and set in motion that plan. Also, imagine what you think will happen if we don't act now, what does that look like? I don't think the GGB offer for new racing and tote licences is a good idea. Many people might see it as an appropriate slap at Phumelela, and indeed they started crying in the shareholders' missive, but we would almost certainly be shooting our collective foot. I hope those shareholders like horseracing because some of them must be wondering exactly what assets are worth.

Tony thanks for reply mate and taking your time to debate.. I think that’s great you have the future of horse racing at heart.. I have a feeling that things are gonna change for the worse.. I hope not.. but I have the feeling.. the reason ... too many individuals in influential positions in racing hate each other.. that’s the reason

Oscar I agree that things will get worse. There are so many pricks "running" their respective empires in racing that its not difficult to believe that they hate each other. I do however believe that the reason things will deteriorate is because these pricks are not there to save racing, they are there to hang on to the perks for as long as they can and will not contemplate stepping aside to save the sport.

Sadly it does appear to be politics and power struggles, rather than getting around the table and coming up with an action plan.

What happened with the "saviours" meeting? Was there ever minutes and a proper press release?

One sometimes gets the impression that its only on the site that we have concerns and its business as normal with racing administrators?

I say 'let it go' for the following reasons :

1.) It is an elitist sport in a largely third world country. There are lots of countries that do not have thoroughbred racing so why not us too?
2.) The 'job creation' justification is wildly exaggerated. If measured against the financial destruction (and accompanying misery amongst the 'addicits' and their families) one less opportunity to gamble is no bad thing.
3.) There is plenty of vastly superior overseas racing to bet on if you so wish and must. It appears that most people 'race on TV' so there will be only a nominal impact on attendances; which are already miniscule.
4.) The welfare groups will breathe a sigh of relief when the numbers of horses bred declines and we have fewer 'retired' and abandoned horses to deal with.
5.) It remains, IMHO, a largely exploitative and abusive activity insofar as the animals are concerned. I am mildly ashamed to have been a part of it for 40+ years and pretty disgusted with myself that I did not pay closer attention earlier regarding how many of these animals are treated and how many of them end up. Does any owner REALLY believe that these creatures were bred to happily spend 22 odd hours per day in solitary confinement?
6.) It would bring a few vets down to earth with a bump!
7.) I met with a prominent breeder recently who commented wryly : Now that some of the 'whales' have gone the 'rats and mice' have returned in force. Given that they appear to be struggling to pay for the horses that they bought recently he wonders how they plan to manage with the keep.....

Step 1 in the action plan to save PGL would be appoint a competent CEO ala Mark Barnes or someone of that ilk.

Step 2: From DJT's playbook....DRAIN THE SWAMP!!

Step 3: Appoint competent people in critical positions...not necessarily racing folk.

Step4 : Deep dive into the dealings of the directors and hold them accountable to the nth degree.

.....Phum has to hit rock bottom and can only be savaged after the dead cat bounce.....the only way to rid the present rot is to make them totally worthless.....then with very low capitalization a takeover by the next best devil we know.....:whistle: .