A renegotiation has taken place between the Royal Bank of Scotland and 32 Red Online Casino – Poker Room, along with the SPorts Betting Company. This was done as a part of a restructuring initiative. This involves a revised loan structuring being carried out between the Royal Bank of Scotland and the online gambling group. The amount involved in this now effort is GBP 3.5 million and it is designed to assure the continuation of a strong ongoing and constructive relationship between the gambling group of 32 Red Online Casino – Poker Room, along with the SPorts Betting Company and the bank. This new arrangement will also serve as a revised gearing in order to form a strong financial basis for the coming phase of company development.
Through its offering of stock to institutions and other financial investors, 32 Red Online Casino is planning to raise another GBP3 million, before expenses. That portion of the offering that is going out to institutions is being completely underwritten by Numis Securities Limited.
The need for approval by its shareholders is a part of this agreement with RBS. Shareholders will need to approve the company’s placing of its AGM to be held on 10 April 2007. This is said to be normal for such transactions and for facilities such as these. It will contain various covenants. Included will be EBITDA, along with gross win and cash headroom designed to make it possible for the Royal Bank of Scotland to monitor the loan. The Royal Bank of Scotland is also being included in the offering and will receive a warrant to subscribe to 560,000 of the company’s common shares at 1p per share. This offer is made to satisfy what would otherwise involve the payment of the banking fees that are associated with the loan.
There is to be an offering of 12 million new Ordinary Shares which are to be valued at 25 pence per share. As the company’s agent, Numis, has conditionally agreed to attain subscribers for placement of the shares. If they fail to achieve this, they agree to pick up that portion directed toward institutional investors themselves. This is a significant undertaking since such shares represent a full 67 percent of the offering. Once the new shares are placed they will make up 17.43 percent of the 32 Red’s increased issue of capital shares.
Some of the company’s directories along with its founding shareholders and their associates, will be demonstrating their faith in the company’s future by their having agreed to subscribe to shares as follows:
CEO Ed Ware, while commenting on the refinancing project has said that the company is pleased as are the principal shareholders that they have succeeded in re-negotiating their banking arrangements. Ware sees this along with the appointment of Martin Saunders and Jon Hale as a part of the management team, as a strong indication that the company’s plans to integrate the BetDirect business as projected when first acquired, is on its way to success.