More news this weekend regarding Gala Coral and their fortunes, this time from the Mail on Sunday in a report published today which states that the gaming firm which owns Gala Bingo has been in talks with their private equity stakeholders to negotiate freeing up much needed cash. Gala Bingo ‘s parent company Gala Coral are reportedly struggling under the pressures from the amount of debt that that is hanging around its neck- which is estimated to be in the region of £2.7billion – and the highly restrictive terms of the debt agreements and hopes that a cash injection would allow them to continue in their plans for expanding their online operations as well as investing more cash in the Italian side of the business.
Another inflammatory headline for Gala?
The report in the Mail on Sunday has the headline ‘Gambling giant Gala’s £550m plan to avoid break-up over debts’ then went on to state that Lazard have been asked to negotiate with Candover, Cinven and Permira and 50 other financial institutions with a view to swapping debt for equity which would release in the region of £550m, but the remainder of the debt with Gala Bingo and Gala Coral’s banks would remain under the existing terms. Of course regular Bingo Hideout readers would know that there is no real surprise that Lazard are involved and looking at various possibilities – swapping debt for equity being one – as we have reported on this at the beginning of August in our no holds barred interview with Gala Coral’s Chairman, Neil Goulden. In the interview we asked Mr Goulden; how a debt to equity swap affect the position of Apollo (who purchased Gala Coral debt at a discount in 2008)? To which he responded “There would have to be at least 75% agreement, no one player can do anything on its own, it has to be consensual amongst the mezz syndicate.”
Italy proving lucrative for Gala
Our recent interview with Mr Goulden gave lots of interesting information about the whole company including Gala Bingo and Gala Coral’s plans for the future, Italy was also mentioned and Mr Goulden was rightly proud of how well the company was doing in Italy with their sports betting operation. Mr Goulden stated that Italy ‘has a culture of gambling’ and the Government is happy to listen and to facilitate gambling as they ‘believe that if people want to gamble let them do it’.
The Mirror also reported last week on the job losses of management roles at Gala Bingo in the planned restructuring programme of the company, which would see some roles lost to make Gala Bingo more smooth running and also to save much needed cash. We have not had official confirmation of either story but will of course keep our readers abreast of any further updates on the position.