Nic Jonsson has reached an agreement with Gold Circle after a midweek clash in the Pietermaritzburg High Court that went the way of the racing operator.
The settlement, which was finalised ahead of a controversial virtual Special General Meeting scheduled to take place on Zoom on Thursday evening marks the end of litigation between the parties.
Nic Jonsson (Pic – Candiese Lenferna)
Turf Talk reports that in terms of the agreement, Mr Jonsson explained that an initial drawdown of R70 million would be permitted to repay a short-term loan and to fund Gold Circle’s operating requirements until mid-October. The remainder of the funds would remain ‘ring fenced’ and board members would have to come back to members to approve additional drawdowns.
This will only be feasible once a clearer long-term commercial strategy is in place for the company whose ongoing financial difficulties had been exacerbated by the Covid-19 lockdown.
He said that it was unlikely that the special resolution to be voted on by members at today’s meeting would have been approved in its current form. “It is unlikely that Gold Circle would have had sufficient funds to continue to trade for the length of time required to call another Special General Meeting. This would have had dire consequences for horse racing as it is the middle of the Champions Season and at the height of the Gold Circle racing season.”
He admitted that, without the drawdown, there was a strong chance that Gold Circle would have had to be placed in business rescue. “This would have had an extremely negative effect on the company and stakeholders in the racing industry in this province. Being in business rescue will considerably weaken Gold Circle’s negotiating position with regard to any new strategic initiatives, structures or partnerships that it seeks to establish,” he explained.
Jonsson welcomed the provision for a five-member Interim Executive Committee (IEM) that will oversee day-to-day management of the company, as well as advise on new business opportunities.
It will also determine the timing and amounts of the R 70 million in Clairwood funding that will be released.
“We realise that it is more important than ever for Gold Circle to put in place a strategic plan that will guarantee both its survival and growth. Together with the concerned members that I have represented throughout this process, I look forward to contributing to ensuring that Gold Circle can look forward to a sustainable future,” he concluded.
