Gambling Group Negotiates Major Loan Facility with Bank

As part of their financial restructuring, 32 Red Online Casino - Poker Room and Sports Betting Company has renegotiated its banking facility with the Royal Bank of Scotland. 

A new loan facility with RBS has been established with the online gambling group for ₤3.5 million. This will ensure the continuation of a "constructive relationship" with the bank and makes use of its revised gearing to form a sound financial platform for future stages in the company's development.

At the same time, 32 Red Online Casino proposes to raise ₤3 million by way of a placing with institutional and other investors. The institutional part of the placing has been fully underwritten by Numis Securities Limited. Numis, as the agent for the company, has agreed conditionally to obtain subscribers for the placing shares, failing which to subscribe itself for the placing shares placed with institutional investors (which represents approximately 67 percent of the placing). The placing shares will represent 17.43 percent of 32 Red's enlarged issued share capital.

A condition of the agreement with RBS is that shareholder approval is obtained for the placing at the company’s AGM to be held on 10 April 2007 and, as is usual for such facilities, contains various covenants, including EBITDA, gross win and cash headroom to enable RBS to monitor the loan.

Ed Ware, Chief Executive Officer, commenting on the refinancing, said: “We are pleased that we have been able to successfully re-negotiate our banking facilities. With this completed and the recent new appointments of Martin Saunders and Jon Hale to the management team, we look forward to delivering on our plans to integrate the BetDirect business that we outlined at the time of the acquisition.”

RBS will also be receiving a warrant to subscribe for 560,000 ordinary shares in the company at 1p per share, in lieu of receiving banking fees associated with the loan. 12 million new Ordinary Shares will be offered at 25 pence per Ordinary Share.

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