Allwyn secures €1.6bn loan to fund initial UK National Lottery costs

Allwyn has secured a €1.6bn (£1.4bn) loan from a syndicate of international banks to fund initial costs involving the takeover of the UK National Lottery from Camelot. The senior facilities agreement will see the Czech firm net €1.6bn in credit from the financial institutions, made up of four debt tranches. The tranches are priced at €441m of amortizing term loans due in 2027, €441m of bullet term loans due 2028, a €300m revolving credit facility due 2027 and a £380m multipurpose facility. Allwyn – Europe’s largest lottery operator – confirmed the package would be used to provide “financing for upfront costs” ahead of the start of the fourth UK National Lottery licence in February 2024. After a complicated legal battle, incumbent licence holder Camelot dropped its challenge against the UK Gambling Commission, allowing Allwyn to begin the transition period. Allwyn also confirmed it was in “advanced discussions” with the Ontario Teachers’ Pension Plan (OTPP) over the potential acquisition of Camelot’s UK operations. The €1.6bn will also be used to fund “shareholder distributions and acquisitions”, as well as refinancing existing indebtedness at the company. UniCredit acted as the global coordinator for the agreement, Clifford Chance acted as Allwyn’s legal advisor and Allen & Overy as the lenders’ counsel. Kenneth Morton, Allwyn chief financial officer, said the new financing was a “testament to the strength of the Allwyn”. Morton said: “I am very pleased by the level of interest that the transaction received despite the challenging capital market environment – all our existing banks have increased their commitments and we are happy to welcome several new lenders into our banking group. “This financing significantly extends our maturity profile, provides us with a flexible financing solution for the upfront costs of the UK National Lottery license and generates additional liquidity to support our further growth and resilience,” he added. Allwyn has pledged to slash the cost of National Lottery tickets from £2 to £1 and double the amount of money directed to good causes. The 10-year licence is forecasted to achieve sales of around £10bn each year.