PE Firms Pump Equity into Gala

Buyout houses Candover, Cinven and Permira have pumped Gbp125m (US$247m) of equity into their gaming portfolio business Gala Coral. The cash injection came on the back of talks with creditors which were worried that the group could run close to its covenant limits over the next few years.
The new arrangement sees Gbp82m of senior debt being paid off and Gbp42m being placed on the balance sheet in return for an easing of covenants.
Gala operates 1,600 betting shops, 165 bingo clubs and 29 casinos. Its revenues have suffered in the last year due to the smoking ban and a rise in tax on casinos in the UK. Gala's 2008 forecast ebitda is Gbp380m, Gbp20m less than last year.
Candover and Cinven have owned Gala since February 2003, when they backed a Gbp1.24bn buyout. In August 2005, Permira bought a 33% stake in the company ahead of its acquisition of Coral Eurobet. In early 2007, the owners suggested they may consider floating the business at the end of that year, but those plans soon cooled.
Elsewhere in the betting sector, UK listed-casino and bingo hall operator Rank has seen its shares rise as market speculation about a takeover offer from Malaysian rival Genting surround it.
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