Gala Bingo Holding Company Completes Debt Restructuring

Gala Coral, the company which owns Gala Bingo, has just completed a very difficult and complex debt restructuring. This transaction entails four non-executive directors joining Gala Coral's board essentially ceding them control of the company. These new board members represent the interest of the site's creditors, and this restructuring has effectively cut the company's debt load by £700,000,000. In addition to operating Gala Bingo, Gala Coral owns a large number of betting parlors along with other gaming related businesses.

£558 million of debt was converted into equity with this transaction and another £200 million in cash was contributed by these mezzanine bondholders in order to pay down debt senior to them. Large buy-out houses Permira, Cinven and Candover essentially exit the picture with this transaction, and Permira is rumored to have suffered a painful £500 loss in this ill-advised foray into the gaming space.

The largest of the mezzanine debt owners is Apollo, and they are projected to emerge from this transaction with a 25% stake in the company. The second largest creditor is Cerberus which will own an 18% stake which they certainly hope will protect their current investment in Gala and not be a repeat of the debacle they experienced with US auto maker Chrysler. 45% of the company will be owned by a consortium of 21 investors including Goldman Sachs, Citigroup and JP Morgan. This allows players at Gala Bingo the added satisfaction that when they win a part of the money is coming from those big nefarious Wall Street banks.

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