Ladbrokes Coral merger boosted by £1.35bn financing agreement

The proposed merger between Ladbrokes and Gala Coral received a welcome a shot in the arm this morning after a syndicate of banks agreed to provide financing worth up to £1.35bn.

The financing, which will be made available should the merger complete, is made up of three tranches – a £600m term facility and £400m and £350m revolving credit facilities.

Ladbrokes is currently in the red to the tune of around £400m and Gala Coral debts total approximately £820m.

Ladbrokes said it had cancelled its existing £55m bank facility in September and its remaining standalone £350m bank facilities would be cancelled prior to drawing on the new facility.

“I am pleased that our relationship banks have shown strong support in putting in place a significant size facility at similar pricing to our current facilities,” Ian Bull, Ladbrokes chief financial officer, said.

“We believe that this facility will provide sufficient liquidity to an enlarged Ladbrokes Coral group following the merger.”

Ladbrokes said today’s announcement meant the Gala Coral debt comprising £315m Senior Secured Note 2018, £275m Secured Note 2019 and £812m Senior Secured Facilities 2018, would not be transferred into the enlarged Ladbrokes Coral group upon completion of the merger

The merger of the two land-based giants is currently under the spotlight from the UK Competition and Markets Authority, however, both firms are confident the combination should get the regulatory go-ahead by the close of H1 2016.