Gala coral Group, the owner of Gala Bingo and the Coral chain of bookmakers could see the new investors in place very soon.  As reported a few month's ago about the proposed plan led by Apollo Management LP, the new deal is likely to be finalised in the first week of June according to city observers.

The new deal has come at an extremely high price as previous investors are now facing record investment losses with Cinven and Candover that originally bought the operator for £1.9 billion in 2003, Permira joined the investment to become an equal shareholder in 2005 and all 3 investment groups were forced to put another £124 million of capital into the group to prevent a breach in banking covenants.

The three investors have now been given a pay off for £10 million to share while the mezzanine debt holders will be handed the whole of the firm's equity in return for writing off £550 million worth of debt and receive a cash injection of £200 million.

The biggest loser in all of this is said to be Permira as it has been reported that they will have lost around £370 million.  Candover and Cinven had invested £416 million between them but recouped £248 million after refinancing some of their stakes with Permira.

For all three senior lenders it will be the largest financial loss they have ever taken and it will still be a huge risk for the new group that will take on the debt.

The company was originally bought for £1.9 billion and it is believed the group now have a current debt holding of around £2.5 billion.  After the restructure and the deal is accepted, the debt pile will stand at around £1.75 billion which is still close to the debt it took on back in 2003.

Neil Goulden, Gala Coral chairman was quoted in coinslot as saying that the bingo has a new strategy in place emphasised on value and this was run out towards the end of January, this has shown a 7 percent increase in year on year admossions and an 8 percent increase in gross profit.

Elsewhere many independents are reporting huge profits due to cost cutting and the recent tax reclaims.  Mecca are reported to be in good shape with some recent positive results.  The sting that Gala has given to to it's current backers will still make private equity firms and investors extremely cautious when it comes to investing in the leisure sector in future.