Leisure & Gaming to sell indebted Betshop
Leisure & Gaming is to sell its Italian-facing Betshop business to Spanish gaming group Grupo Pefaco, following a suspension in trading of its shares in May.
Leisure & Gaming is to dispose of its Italian-facing Betshop business to Spanish gaming group Grupo Pefaco in a deal worth up to €5.3m (£4.4m) after the company’s bankers said they were no longer prepared to bankroll the company and demanded repayment of all debts.
The sale follows a suspension in trading of L&G shares on London’s AiM list in May, after the Betshop business was hit by poor sports betting margins arising from the consistent success of the dominant football teams across Europe since the start of the year.
L&G will receive a minimum of €3.4m from the sale of Betshop to Newco, a company established and backed by Grupo Pefaco SL, which operates a number of online betting and gaming sites based in Spain, plus an additional performance-related payment of up to €3m, offset against the repayment of an intercompany debt of €1.1m.
The company’s only asset following the disposal will be approximately €0.9m of cash plus a further €0.6m due on 31 December 2011.
L&G said in its statement it will now seek shareholder approval for the disposal of Betshop and the reclassification of the company as an investment company at a General Meeting on 29 September.
The company said that without the proceeds from the disposal, the company would need to cease trading by 16 October 2010.