LNG Placed Under Administration
Beleaguered Leisure & Gaming (LNG) with its principal asset Betshop Groupe (Europe) Ltd (BSG) sold as a going concern to Honeymead Services for the amount of €1m, this only a fifth of the amount it consented to with Pefaco earlier this month.
LNG made the announcement earlier this month that its agreement with the Spain’s Grupo Perfaco has not been successful for the sale of its gaming subsidiary BSG; the deal would have landed them €5.3m. The sale fell through the mat since the contractual terms expired with Grupo Perfaco without any option of renewal.
LNG’s directors were compelled to consult with joint administrators Philip Watkins and Geoff Rowley of FRP Advisory, putting the company effectively into administration yesterday at 4.36pm and consenting to sell BSG to Honeymead, a company operated by a consortium of investors including Gabriel Chaleplis, who is also a director of BSG.
It was a smart move in selling BSG as is and has secured the jobs of over 600 agents and staff members in Italy, Greece, Cyprus and the UK. Initially LNG said it would sell BSG in July this year.
LNG employed FRP Advisory on October 12th and primarily approached 13 “possible interested parties” and five turnaround funds, based on a statement released by LNG, the cut-off date to receive offers for BSG was October 14th, and the buyers had the option of conducting their due diligence first before buying.
”Financially the group was in “dire straits” according to the statement with, requesting a further €3m to boost its investment, plus an additional €1.5m to cover operating costs into BSG, €0.5m to pay the company’s latest creditors and €1m had to be paid immediately to the bank since it was in arrears. Top top it all a further loss of €450k was incurred by its sports betting site in a single week at the beginning of this month “further contributing towards BSG’s financial woes” he added.
In total four offers were put forward including the acquisition of an intercompany advance of €0.9m due from BSG to LNG. LNG said that it was a “materially reduced offer” by Perfaco and interest from a “reputable internet casino vendor”. In the meantime Honeymead has revised their original offer to €1m with €500k payable upon conclusion of the deal and €500k to be paid in increments over a 12 months period in four instalments of €125k. Other parties interested retracted from the bidding process.
The trading of LNG’s shares has been suspended on London’s AIM market on May 21st after significantly poor betting margins were hit by Betshop, because of the resounding success of the prominent football teams across Europe at the beginning of this year.[addtoany]