British gambling operator Ladbrokes announced today that it had secured a facility totaling £1.35 billion with several banks in order to fund the proposed merger with rival gaming company Gala Coral.
The said debt facility has been divided in three separate tranches. Tranche A is a Term Facility of £600 million and is due October 2016. In fact, its due date can be extended up to January 2018. Tranche B is a Revolving Credit Facility of £400 million and is due October 2020. The third tranche – Tranche C – is due June 2019 and is a £350-million Revolving Credit Facility.
Ladbrokes also revealed that an existing bank facility of £55 million, which was due to expire in December 2016, was canceled in September. What is more, remaining bank facilities of £350 million, which are due to expire in June 2019, will also be canceled as a condition for “drawing on the new facility.”
The announced facility will be available to be drawn once the merger is completed.
Earlier this year, Ladbrokes and Gala Coral announced that they would merge their operations to create the £2.3-billion gambling operator Ladbrokes Coral. In fact, once the merger is completed, the enlarged group would be the largest betting shop chain across the UK. Officials for both companies also pointed out that they will look to expanding their online presence in the years to come.
Ladbrokes shareholders would own 51.75% of the new business and Gala Coral ones would hold a 48.25% stake.
Here it is also important to note that Ladbrokes said earlier today that Gala Coral’s debt would not be transferred to the new entity upon the merger’s completion.
The announced refinancing would probably be one of the last acts Ian Bull would take care of as a Finance Director of Ladbrokes. Back in September, the executive hinted at the possibility to leave the company before it ties up with rival Gala Coral.
Commenting on the deal’s refinancing, Mr. Bull said that he is particularly pleased with the fact that banks had supported the placing of the considerable facility at a price similar to the company’s existing facilities. He also pointed out that the new facility would most definitely provide Ladbrokes Coral with sufficient liquidity once the merger is completed.
