Flutter plays for time in $1.3bn Kentucky legal case

Flutter Entertainment has filed a motion to delay the enforcement of a $1.3bn fine from authorities in Kentucky as the operator seeks to have the case reviewed by the US Supreme Court. On Monday, Kentucky Supreme Court judges resumed deliberations to consider motions from Flutter’s legal counsel, the latest of which is to delay enforcement while the Supreme Court review petition is considered. The Dublin-headquartered operator requested the review after judges dismissed its petition to have the initial judgment re-examined by the presiding court in March. Kentucky authorities filed their own motion to provide the state’s opinion on the Supreme Court review petition. The court now has until 29 April to respond to these motions. Earlier this month, Flutter petitioned creditors holding term loans and senior unsecured notes to change certain events of financial default which could arise from the Kentucky Supreme Court decision, should it be ratified and enforced. Consent to change these events is required from 50% of creditors in both cases. Issuing an advice note, US ratings agency Moody’s said the potential financial implications of enforcement could be “credit negative” for Flutter. However, Moody’s said its Ba1 rating of Flutter would not be affected during the petitioning process as the ratings agency had “very high” confidence that consent would be received from creditors. “Moody’s understands that Flutter has several options to cure the potential event of default within the grace period, including the consent request that it has initiated, a refinancing of existing debt before the end of the grace period or a settlement in respect of the judgment,” Moody’s said. “Moody’s also understands that the company tried to manage the risk of these proceedings, but to be faced with the prospect of an event of default, regardless of how unlikely such a scenario is, is highly unusual and unexpected for a company rated Ba1. “The company has indicated that it is confident that any amount ultimately paid will be a limited portion of the reinstated judgment and has reiterated its intention to dispute the judgment through all legal routes available to them. “Although the final outcome and timing remain uncertain at this stage, Moody’s estimates that the company has sufficient liquidity to cover all scenarios but cautions that paying a large amount without refinancing would deteriorate its liquidity profile,” Moody’s added. In early trading, Flutter shares dipped by 75p, or 0.5%, to £150.85.