Gala refinancing returns £275 million to shareholders
Gala Group today is pleased to announce the successful completion of a refinancing process in which it has renegotiated its borrowings to take advantage of the company’s strong financial performance and favorable market conditions.
The company has repaid approximately half of the £550 million invested by Cinven and Candover when they acquired the company in March 2003. As a result of the refinancing, total debt stands at £945 million. All shareholders will retain their existing stakes in the company.
The senior refinancing was led by Merrill Lynch and The Royal Bank of Scotland with mezzanine debt arranged by Intermediate Capital Group.
Matthew Roberts, Gala Group Finance Director, said:
“Gala’s strong performance has enabled us to repay our shareholders half of the money they invested less than two years ago. Our financial record, as evidenced by our recently reported 18% increase in annual sales, has also allowed us to tap into buoyant debt market conditions and to further reduce our cost of capital.”
Commenting on the refinancing, Cinven Partner, Peter Catterall, said:
"A combination of strong strategic direction from the management team and the ongoing development of Gala's offering to its members has been the foundation of the success of this business. We look forward to working with the management team to build on this success."
Gerard Conway of Candover added:
“This refinancing illustrates the quality of Gala’s trading performance and reinforces the ability of the management to deliver excellent results. Gala continues to be a strong investment for Candover.”
As reported on 20th January 2005, Gala’s total sales for the full year to September 2004 were £544.4 million, an increase of 17.9% on the previous year. In the seven weeks to 7th January 2005, Gala Bingo grew sales by 7.2% to £55.0 million. Over the same period, Gala Casinos grew sales by 5.7% to £16.5 million.