Ladbrokes agrees funding for Coral merger

Ladbrokes agrees funding for Coral merger

Friday, October 9, 2015 Totally Gaming
CFO Ian Bell welcomed Ladbrokes' finance arrangements

Ladbrokes has agreed a £1.35bn (€1.82bn/$2.07bn) facility with banks to fund its proposed merger with Gala Coral.

The gambling operator said that the new facility has three tranches and will be available for drawing subject to completion of the merger, with the news coming at the end of a week in which Ladbrokes’ share price has risen by almost 10 per cent.

Ladbrokes added that as a result of the financing, Gala Coral's debt will not be transferred into the new Ladbrokes Coral at completion of the merger.

“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,” said Ladbrokes’ chief financial officer Ian Bull, who is to leave the company early in 2016. “We believe that this facility will provide sufficient liquidity to an enlarged Ladbrokes Coral group following the merger.”

The merger between Ladbrokes and Coral was announced in July, with the combined company set to be worth £2.3bn.

The three finance tranches include a £600m term facility to be repaid in a year, with an extension option to January 2018. The other two tranches are a £400m revolving credit facility until October 2020 and a £350m revolving credit facility until June 2019.

Ladbrokes' existing £55m (December 2016) bank facilities were cancelled in September 2015 and its remaining standalone £350m (June 2019) bank facilities will be cancelled as a condition precedent to drawing on the new facility.

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