There has been a lot of reports over the last year documenting the financial woes of Gala Coral, one of the UK’s biggest gaming operators and parent company of Gala Bingo. Despite Gala being one of the biggest names in both local and online bingo, Gala Coral have had to slash operating budgets in order to make burgeoning debt payments.
After much restructuring of it’s debt to sell on some debt for equity amongst it’s private investors, news reaches us that the Gala Coral group is very close to sealing the deal on a £200m deal to restructure its finances.
It looks like Gala Coral bigwigs are due to meet with senior lenders soon to try and sort out the finer details of the deal, which would hopefully see an end to a year of bad press when it comes to Gala Coral’s banksheet.
And it will be a situation that could effect us everyday folk more than we realise, with one of Gala Coral’s debts lying with the Lloyds Banking Group and Royal Bank of Scotland – a bank which was bailed out with taxpayer money during the banking crisis.
The latest plan would see a group of private investors taking on around £540m of so-called mezzanine (or riskier) debt, and injecting a further £200m into the group in return for a controlling stake in Gala Bingo, allowing it to free up some cash to keep the company running. It is hoped this extra money will mean the company can avoid having to make the huge job cuts it made last year, including the scaling down of it’s land based bingo operation in Gala Bingo.
This mezzanine group involves financial powerhouses such as Goldman Sachs, Apollo Management and Cerberus. If the deal is agreed, it would see the existing owners of the company, the private equity firms Candover, Cinven and Permira, left with a small slice (probably no more than 10 per cent) of the recapitalised company’s equity.
According to a report in the Times, the Gala Coral debt stands at around £2.5 billion of debt, a result of its buyout by private equity firms. Coupled with the recession and smoking ban, the group has seen it’s total revenues unable to keep up with growing debt repayments, leaving it in a rather sticky financial situation.
And with the extra money, it is hoped the group will be able to invest in expansion opportunities, restoring it to it’s position as one of the market leaders when it comes to online gaming.
Despite it’s financial woes, it seems that Gala Bingo has still managed to tick over nicely over the last few months, with plenty of massive promotions tempting online bingo fans to help the Gala Coral group on the road to recovery! With a massive deposit bonus and regular big payouts thanks to Gala Bingo’s Cash Climber jackpot (including a whopping £90k win recently!), it seems that despite all their woes, Gala Bingo is certainly nothing but the best and brightest when it comes to online bingo!
