Ladbrokes Signs £540m Debt Deal With Banks

Ladbrokes, the second largest betting company in Britain, has announced that it has signed an agreement with its banks that will see it benefit from a $847 million or £540 million debt facility for a term of five years. The gambling operator owns 2,100 betting outlets across the UK.

On Friday last week, Ladbrokes announced that its brand new debt facility has its maturity date in 2016, replacing its current £560 million facility, which has its maturity date in 2013. According to the company's estimate, the new joint interest rate will rise to 7.5 percent in 2012.

However, the debt facility of £540 million is £20 million less than the company's current financial facilities. In spite of the lowered figure, Ladbrokes is confident that the new facility will provide it adequate finances even after it returns its bond worth £131 million in July next year. Ladbrokes also has a £225 million bond, which is set to mature in 2017.

Ian Bull, the chief financial officer for Ladbrokes, said that the new arrangements, along with Ladbrokes proven track record for strong cash generation illustrate that the company is on strong footing and that the company will continue with its reinvigorating plans. He also expressed satisfaction that the company has extended its debt maturity profile with new facilities and that the company welcomes lenders' support.

Ladbrokes recently withdrew from discussions for the acquisition of Sportingbet, while it also withdrew from acquisition talks with 888 Holdings earlier this year.

In October, the company reported an underlying operating profit rise in the third quarter of the fiscal year, most of which was attributed to an increase in winnings on gaming machines. Ladbrokes also expressed its confidence that it will meet its annual targets in spite of the recession that has impacted wagering.

Ladbrokes Sees Profits Increase

Ladbrokes shares rose by 2.6 percent during the past two months, closing at 120.80 pence Thursday, which puts the total value of the business somewhere at £1.2 billion. Although the company has increased its profits by 7.5 percent this year, it has fallen by 67 percent during the past five years.

Besides land-based betting outlets, Ladbrokes offers comprehensive online gaming services, which include poker, bingo, financials, sports betting, and casino, where players can claim free bonuses, participate in lucrative promotions in a secure gaming environment.