| Britains Largest Bingo Operator may split |
| Sunday, 26 July 2009 00:00 |
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The Royal Bank Of Scotland are considering the financial future for The Gala Bingo Group. RBS may wish the company to be split up and sold off in parts with major finance restructuring plans that have been instigated by the bank. The proposal has come up just ahead of the debt deadline for £80 million in September and a further £150 million for the year 2010. The report was in the Observer and explains that the RBS stake is low in comparison to the other stake holders but they do play an influential role as an agent for the Group's senior debt holders. Bingo Supermarket reported a few months ago that Gala had appointed investment bankers Lazard to consider restructuring options including a debt for equity swap in the Group. A spokesperson for Gala commented "We are not looking to sell off assets or break up the group. We have £200m on the balance sheet and we are not seeking an equity injection." The Observer however has seen the presentation that was circulated to potential Gala Coral investors. It states that Gala are considering a number of options to raise cash, the current main backers "Candover and Permira are financially strained and unlikely to inject any more equity." RBS states in the presentation that there is an opportunity for new investors to put in up to £250 million but the investment will not give any control whatsoever to the investor as set out in Gala Coral's debt agreements. Last April, Gala Bingo Backers injected £125 million into the firm but have since written the value of their investments down to nothing. The Group is also fighting a multi million tax reclaim with the Government but the recent change in gross profits tax is now having an increased burden on the Group with an extra 7 percent tax being taken of their bingo income. Gala Coral are the UK's largest bingo chain with a dedicated online bingo site registered in Alderney. They also own the Coral high street Betting shops and an online betting service.
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