888 Pushed to Change Payment Plans for Wink Bingo

888 Holdings recently had to alter its payment plan for Wink Bingo since it was unable to settle the complete earn-out payment, which was due on May 21st this year. The company was pushed to make this decision because of the outstanding performance of Wink Bingo.

As per the current plan, 888 Holdings will pay only £9.26 million to Daub Ltd, which owns Wink, and will pay £9.26 million and £6.173 million on May 21st, 2011 and Aug 31st, 2011, respectively. The rest of the balance will be paid by May 21st, 2012. Besides this, 888 will also have to pay the interest due on all payments made after May 21.

Initially, 888 acquired GlobalCom from Daub at the rate of $43 million in March 2007 in order to get bigger share from the online bingo world. However, although 888 has earned more revenue after acquiring Wink Bingo, it is currently discovering that it has paid more for Wink Bingo than originally intended after completing its full payment plan.

If there is a change of management at 888 before it completes its payment plan for Wink Bingo, Daub Ltd can compel the operator to sell Wink Bingo to enable quick repayment. Daub also has ample security for Wink Bingo, enabling it to sell the online bingo site if 888 got liquidated or witnessed a change of management.

A number of restrictions will be binding 888 till it pays the complete earn-out payment for Wink Bingo. Some of the restrictions imposed on 888 will fall on areas like distributing dividends among its shareholders, making payment bonuses, advisory fees, disposing or acquiring any materials, and suspending or delisting shares available on the London Stock Exchange.

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