Agreement extends maturity on debt of $197.7 million
The Montreal-based online gambling group Amaya Inc. has announced that it has reached agreement with "a major creditor" (believed to be the Scheinberg family who previously owned the Rational Group) which extends the maturity on a debt obligation of $197.7 million, pre-empting the need for a dilutive equity raise.
The debt, which was in respect of part of Amaya's $4.1 billion acquisition of Rational Group in 2014, was due to be paid on February 1, 2017. Under a previous agreement, Rational Group, the owner of PokerStars and Full Tilt, had reserved the right to compel Amaya to issue shares to pay down its debt.
Amaya says it now intends to pay down the obligation in cash over the course of 2017.
The announcement helped to remove some uncertainty over the company's debt repayment schedule, with investors bidding up the stock on Monday. Shares in Amaya closed up 1 percent at $19.25.
"Based on our operations and performance in 2016, we are confident in our ability to repay the balance of the deferred purchase price in a timely manner," Rafi Ashkenazi, chief executive officer of Amaya, said in a company statement Monday which revealed that Amaya has agreed to pay late fees to Rational Group that will range from the 30-day London Interbank Offered Rate plus 85 basis points (roughly 1.6 per cent), to 30-day Libor plus 135 basis points (roughly 2.1 per cent).
Online Casino News Courtesy of Infopowa