Gala Bingo are the biggest in the UK, despite their latest spate of financial problems. Without doubt, you would have heard of all their cost cutting exercises over the past months. Streamlining their staff (although they still employ around twenty thousand people), club closures, they’ve been doing it all! Even so, Gala Coral still own around two thousand betting offices, twenty seven casinos, one hundred and forty eight Bingo Halls, and two greyhound stadiums. So, not a bad portfolio, by any means…
Of course, a certain amount of the problems were procured by the smoking ban, the onslaught of the economic crisis, and heavy tax duties. However, Gala Coral’s £2.6Billion debt, has had a greater impact upon business. On that debt, Gala Coral need to find around one hundred million pounds a year. Just to cover the interest. Due to terms and conditions attached to those debts, the company can‘t utilise the £250million they have on the books. Something, of late, which has been causing a lot of frustration to Gala Coral Chairman, Neil Goulden.
According to a report in the Sunday Times (blimey! Bingo in the Times eh? ; ) a deal with Gala Coral’s private investors (Primera: Civen and Candover) has been agreed. Collectively, they owe their investors around £540million (oouchhh), which is a substantial amount, by anyone’s standards! As was speculated previously, the investors will be writing off debts for a stake in the business. In this case, that is going to be a 50% stake.
Although Gala are set to surrender half of their assets, this deal still offers the company the chance of long term stability. By doing this, they have released the £250million, and will be free to invest, and rebuild the business. Being able to utilise this money, should prove to be a positive move, on the company’s behalf.
