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- Liva & Laia : 15th November
British gaming company Gala Coral expects to agree a restructuring deal in the coming months, its chairman said, seeking to clean up a balance sheet laden with 2.7 billion pounds ($4.5 billion) of debt.
Gala's board of directors is meeting on Friday to discuss a proposal from a group of mezzanine lenders, led by Intermediate Capital Group and Park Square Capital, who have offered to cut their debt in exchange for a stake in the company and representation on the board.
Neil Goulden, group chairman, said on Thursday that Gala's recent performance will help to secure a debt deal in the coming months.
"The combination of solid trading and strong cash flows will allow us to lead a successful restructuring and ease the current constraints on business growth" he said in a statement that was emailed to the press.
The company generates about 300 million pounds in free cashflow, he also said.
The company's present owners - private equity companies Candover, Cinven and Permira - have not fully agreed to the lender proposals, sources have said.
However, the sides have moved closer to agreement in the last few days.
Gala Coral owes lower-ranked mezzanine lenders just over 500 million pounds and senior debt holders about 2 billion pounds.
The senior lenders need to approve the proposals and will be approached after there is agreement between mezzanine investors and the company's present owners, sources have said.
A banker said on Friday the senior lenders are likely to be supportive of the mezzanine's plans.
"The proposals are likely to be accepted with some tweaks like increased margins or tighter covenants" the lender said.
Loan traders said investors are looking to buy stakes in Gala's mezzanine debt in expectation of a deal. The value of the mezzanine loan has risen 2.9 percent over the last week to 53 percent of face value, according to Thomson Reuters LPC data.
The price of Gala's most actively quoted senior debt tranche, the term loan B, also rose slightly in the last week,and is now priced at 85.8 percent of face value. ($1=.6006 Pound)