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UK’s Biggest Bingo Operator Facing Financial Issues

Written by: Nikola Zugic on 29/07/2009 23:00
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Considering the future financial issues Gala Bingo Group is facing, the bank, Royal Bank of Scotland (RBS) may ask the company to split up and sell in parts. The bank has been reviewing the bingo operator’s finances and has instigated major finance restructuring for Gala Bing Group. This is a new proposal that was offered by the bank in lieu of Gala Bingo’s debt deadline amounting to eight million pounds. The deadline is set this September of 2009. Another debt deadline for the amount of another one hundred fifty million pounds is set for year 2010.

RBS plays an influential role even though their stake is lower than other stake holders of the Gala Bingo Group. Nevertheless, they have a say as the company’s agent for the senior debt holders. A few months ago, Gala Bingo has already appointed the Lazard investment bankers to take a look at their restructuring options which included a debt for equity swap as they are not looking to sell any of their assets or even breaking up the group. They added that they still have two hundred million pounds in their balance sheet and so they do not wish any equity injection. But will see what they have to say after the proposal from RBS came up.

The current main backers of the Gala Bingo Group, Permira and Candover are already financially strained. However, the group stated that they are seeking other options, and many at that, to raise the funds. RBS also thinks that there is a great opportunity for new investors to raise two hundred fifty million pounds. But they are also stating that the investment won’t give any control to the investor as written in the debt agreements. If you will remember though, last April, about one hundred twenty five million was injected into the group through various backers but up to now, the value of their investments haven’t provided any results just yet.

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