BANK EXPLORES POSSIBILITY OF GALA CORAL BREAK-UP
31 July 2009
Gambling group investors approached with
possibilities to ameliorate debt burden
Royal Bank of Scotland - itself in receipt of UK
government financial assistance - has reportedly been
sounding out leading investors in the Gala Coral land
and online gambling group on selling off an unspecified
part of the GBP 2.7 billion debt-burdened group to ease
its situation, reported the Observer newspaper this
week.
RBS's direct exposure to the gambling
group's debt is apparently relatively small, but the
bank acts as agent for the senior debt holders involved
and therefore has influence. The Observer report reveals
that the bank made a presentation to these clients,
inviting them to take a stake in the gambling group or
to bid for any of its bingo, casino, betting-shop or
online divisions.
The introduction to the
presentations read: "The [Gala Coral] company needs to
address its debt burden and is considering a number of
options to raise cash. Candover and Permira are
financially strained and unlikely to be willing to
inject more equity." The conclusion mentions the
alternative to further investment being found of
spinning off "one of the company divisions."
The
gambling group, which is currently facing loan repayment
deadlines of GBP80 million by September and GBP150
million by 2010, apparently had no knowledge of the
bank's action and had not given its consent to the move.
Gala Coral is jointly owned by private equity houses
Candover, Cinven and Permira, and the company has been
active in trying to raise GBP 200 million to solve its
immediate debt situation and provide funds. Options
being considered are reportedly debt-for-equity swops,
or persuading current investors to increase their
holding.
Online Casino News Courtesy of
Infopowa
More news here.
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