Re:Gold Circle - LETTER OF INTENT

Just to keep ABC readers in the loop 🔁

LETTER OF INTENT

On 06 April 2023 the Board received a joint Letter of Intent from Hollywoodbets and Mr Greg Bortz, putting forward a financial proposal for consideration.
The conditions of the Letter of Intent have been fully assessed through the Restructure Committee appointed by the Board who have made recommendations to the Board for consideration.
The Gold Circle Board met on 20 April 2023 to consider the Letter of Intent in more detail and to assess whether there was any merit in progressing the proposal, and what impact the proposal would have on all stakeholders including local and provincial authorities. In reviewing the proposal, the Board took note of the 2023 to 2027 extrapolated projections. The full Board of Directors unanimously approved the proposal and the changes that emanated from the Restructure Committee. The Board has resolved to recommend the proposal to Club Members at a meeting to be convened in due course should the proposers be satisfied with their due diligence process.
Hollywoodbets and Mr Bortz have been afforded a three-month exclusive Due Diligence period.

How in GOD's name does Michel Nairac still sit in the CEO position at Gold Circle?

Under his watch Hollywood had to bail Gold Circle out and are now intent on taking ovwer Gold Circle!!!

Cant open letter but the new regime is up and running ! Beautifully engineered by the new order😎

Could this be the end of the Open Bet laid by Hollywoodbets in the near future.

The take outs support stakes. It will make sense for more punters to wager directly with the Tote.

Only WSB is the other major Open Bet bookie.

naresh wrote:

Could this be the end of the Open Bet laid by Hollywoodbets in the near future.

The take outs support stakes. It will make sense for more punters to wager directly with the Tote.

Only WSB is the other major Open Bet bookie.

The open bet is still laid by HW on Cape Racing why would they change?

I wonder if any of the people employed in senior positions at Gold Circle, some for many years, will have the grace to be embarrassed by their performance? Why does HW/Bortz see potential in this failure and the people entrusted to steer the ship over the years have maintained a collision course onto the rocks without changing direction.

It is clear that mismanagement is the biggest reason racing ( not just GC ) is the reason we are where we find ourselves today. Inefficient overpaid slap each other on the back buddies who should be tarred and feathered for their uselessness.

@Sadha Naidoo,

Any announcement regarding pending corporate action warrants an unambigious standalone announcement, independent of other operational challenges, highlights or celebratory outlook!!!

Your presser is convoluted to say the least and lacks objectivity and focus on the multiple issues, challenges and opportunities at hand.

I am shocked that a Company can receive an offer on 6 April 2023 and within 10 business days achieve the impossible:

- "The Gold Circle Board met on 20 April 2023 to consider the Letter of Intent in more detail and to
assess whether there was any merit in progressing the proposal, and what impact the proposal would
have on all stakeholders including local and provincial authorities. In reviewing the proposal, the
Board took note of the 2023 to 2027 extrapolated projections. The full Board of Directors unanimously
approved the proposal and the changes that emanated from the Restructure Committee. The Board
has resolved to recommend the proposal to Club Members at a meeting to be convened in due
course should the proposers be satisfied with their due diligence process""

Here are a few points for you and the Gold Circle Board to ponder whether this announcement and your governance processes are a sham or not?

1) Gold Circle, having received an offer on Thursday, 6 April 2023, what processes did management follow to assess the offer and how many internal meetings and engagement were held to evalauate the offer?
2) Did Gold Circle engage the offeror to discuss and clarify the offer or was this offer such a masterpiece that no clarity was required on any aspect of the offer?
3) When did the Board mandate the management to incur costs to appoint external legal, financial and other advisors to assess THIS offer (considering the liquidity cries form this Gold Circle Board and management for the better part of this decade)?;
4) When did management / Restructure Committee discuss, negotiate and agree on the scope the work for independent advisors following a competitive procurement process to appoint and mandate such advisors?;
5) When did the management / Restructuring Committee prepare a submission to the Board of Gold Circle on the offer, including the independent opinions of the external advisors!;
6) When did the company secretary receive a request to coordinate a Board Meeting to appoint a Restructure Committee!;
7) When did the Restructure Committee receive a mandate from the Board of Gold Circle to assess the offer received? and to afford the Restructure Committee adequate time to perform their duties and conclude on their recommendations to the Board of Gold Circle!;
8 ) When did the company secretary coordinate a further meeting of the Board of Gold Circle to deliberate on the submissions of the Restructure Committee and to indulge the Board of Gold Circle to Resolve to " recommend the proposal to Club Members"

If Sadha Naidoo and his Board of Gold Circle are this efficient to achieve steps 1) to 8 ) above in 10 business days, you do not need Hollywoodbets nor Bortz if you Board displays unprecedented levels of efficiency and responsiveness.

What a load of bulldust to member of Gold Circle.

PS. If a board of Directors of the size of Gold Circle, the management and their external advisors could achieve this in 30 business days from the date that you received the offer, it would be a remarkable feat!

This Board and management are weak. They were put there to ensure that the takeover takes place.

Why were proposals not called for from other parties. Surely this goes against the King 4 code of Good Corporate Governance!!!!

Hi Ash

Let me start off by saying I love it when anyone takes time to draft a detailed, thoughtful post. It means that the person cares deeply about the sport of ours. So thank you!

With that being said, I have the complete 180 degree opposite view. I do not have the energy to refute your points one by one, so I will do so at a high level:

1. You asked how this process could take place so quickly. My view is - why on earth did it take so LONG!!!!
2. The company is fast heading into the abyss of insolvency - massive losses without the capital and balance sheet to withstand them. Speed is needed.
3. Gold Circle is forecasting R600MM in cumulative losses (get your head around that figure) between now until 2027.
4. Your issue is the speed with which GC board moved. My issue is the lack thereof! The longer it takes before we can get in to try claw out of the hole, the deeper the hole!!!!
5. There are no tangible assets in this business. The racecourses are leased not owned. The training facilities are owned, but Summerveld is needed. The leaves Ashburton as the only potential asset to generate funds. It is a rounding error when compared to R600MM in lots in the next 3-4 years. Point being, some crazy investor is going to need to fund these losses with fresh, cold hard cash.
6. There is NO ONE standing the in the queue! If you know of someone to willing to fund these losses, in exchange for nothing, please let me know! Remember, this is not like some betting company coming and sponsoring a raceday or two. This is funding massive losses for zero return or publicity.
7. I am Chairman of Cape Racing and have well over 9 figures invested therein. I have just bought control of Grand Parade (a publicly listed gaming business) for just under One Billion rand, and have become CEO of this public company. Point being, my money and my time is fully committed elsewhere at this juncture. Funding losses at Gold Circle and coming in to help implement a turnaround is not something I was planning on doing or hoping to do. I am doing it because if Hollywoodbets and myself don't, WHO ON EARTH WILL? I do not have the time, to be honest, but will find a way.
8. Regardless of the board approval, it is the MEMBERS who get to vote. The board's vote is but a recommendation to members. If members don't like the idea of Hollywoodbets and my time and money, they must simply vote no. I can honestly say I will be absolutely fine if members take that decision. It is up to them.
9. If members decide not to approve the deal with us, I hope there is a source of capital stading in the wings. Because if not, there are but a few years left.

Bottom line - I believe that everyone should be saying "Holy Crap - thank you!" and not looking for spooks or conspiracy theories.

Just my two cents.

Oh, and while I have the soapbox, Pomp & Power for the HB Durban July

Have a good one.

Greg

Sammy, there is no one in the queue! Gold Circle publicly stated that they were bleeding to death. There is no one putting their hands up to fund losses for no return. No business person would do so. Only some sickos who are mad for racing!

Regardless, the decision is to be made by the MEMBERS, not the board. Every member has a vote. If members believe there are ANY alternatives out there (let alone a better alternative), they simply need to vote NO.

I can assure you I am not lobbying for anyone's vote or support. If members decide not to support our buyout, it will come as a relief! I have enough stuff on my plate to keep me busy. And my kids will be happy that I didn't squander more of their money on the horse industry!

Mark my words - you have them in black & white: no one coming in to Gold Circle will make money from racing in KZN. The end. This is an effort to be philanthropic. If our money and my time isn't wanted or needed, no worries at all. I just want racing in KZN to survive - it has the potential to be world class! Its fan base is the most passionate in the world. It deserves to survive.

Have a good one.

Greg

Good morning

Thank you again for posting directly on the site with your overview Greg, it's much appreciated.

I think it's fair to say the operators have had a few challenges over the last few years and they will probably say that the "open bet" has caused the most damage.

With this in mind, what is the mindset from Hollywood/Bortz going forward in regards to the open bet ?

Greg_Bortz

Even if only a mile, what about Pomp And Power for today? 😊


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