LONDON (Alliance News) - Ladbrokes PLC on Friday said it has signed a GBP1.35 billion lending facility with a syndicate of relationship banks to provide committed financing for its proposed merger with Gala Coral Group Ltd.
The betting company said the new facility has three tranches and will be available for drawing subject to completion of the merger.
Tranche A comprises a GBP600 million term facility to October 2016 and subject to extension options to January 2018, tranche B comprises a GBP400 million revolving credit facility to October 2020, and tranche C comprises a GBP350 million revolving credit facility to June 2019.
Ladbrokes's existing GBP55 million December 2016 bank facilities were cancelled in September and its remaining standalone GBP350 million June 2019 bank facilities will be cancelled as a condition to drawing on the new facility.
It said it intends for the GBP100 million September 2022 and the GBP225 million March 2017 Ladbrokes bonds to remain in place following completion of the merger.
As a result of the financing, Gala Coral debt comprising a GBP315 million senior secured note 2018, GBP275 million secured note 2019 and GBP812 million senior secured facilities 2018 will not be transferred into the enlarged Ladbrokes Coral group.
"I am pleased that our relationship banks have shown strong support in putting in place a significant size facility at similar pricing to our current facilities. We believe that this facility will provide sufficient liquidity to an enlarged Ladbrokes Coral group following the merger," Chief Financial Officer Ian Bull said in a statement.
Ladbrokes and Gala Coral agreed the merger in July. It will create a company with a market capitalisation of around GBP2.1 billion and the largest bookie retail estate in the UK.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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