One of the UK's leading gambling groups, Gala Coral, has cut a deal
that has seen its equity owners agreeing on a debt restructuring deal with its
mezzanine lenders.
The private equity owners, namely Candover, Permira and Cinven, gave their
thumbs up on the deal that will see both sides enjoy equal control of the
company that is close to breaching its terms of a £2.7 billion debt.
Private equity owners and mezzanine lenders, led by Park Square and
Intermediate Capital Group, will sit together on the board of directors, with
equal representation, according to the terms of the new deal.
Gala Coral, the group that runs more than 150 bingo clubs across the United
Kingdom, as well as 1,600 betting shops and several top online products, has
been forced to face facts that it needs to reach a deal with its lenders due to
its financial situation.
Senior lenders will be presented with the deal on Friday to give their final
approval, with one source saying: "We want a fully baked deal before looking to
get this approved."
Junior lenders are becoming more and more active in protecting their
investments, not only Gala Coral's case but also across Europe.
Reuters quoted a senior finance banker saying: "Mezzanine lenders are being
more pushing and coming up with their own solutions rather than accepting senior
lenders' solutions after they were wiped out earlier this year."
Previously, rumours were doing the rounds in the UK gambling industry that
Gala Coral's founder, John Kelly would be returning to the debt laden company as
part of its impending refinancing.
However, those close to management dismissed the idea and said: "If someone
were to ask John whether he would be willing to come back and help Gala, I'm
sure he'd say he'd consider helping. But nobody has approached him and asked him
whether he'd come back as chairman. It is simply untrue."
