Sportech secures "growth" refinancing
Will allow it to grow business in the next three years - reflection than the banks are "a lot more confident" about the group's prospects, says analyst.
Sportech has secured a multi-bank structure agreement that will allow it to invest in growing the business in the next three years, the listed football pools and tote betting provider has announced this morning.
The new £75m multi bank facilities, compared to the previous single bank arrangement, have increased by 25% to support the growth of the business and will provide debt refinancing and “strengthen relationships” with its lenders, a market statement said.
Nick Batram, analyst at Peel Hunt, called the new deal “strategically important” in that it allows management to focus more on growth rather than simply debt reduction.
“By expanding the lending group it is also a reflection that the banks are a lot more confident about the group’s prospects,” he said. “If we see evidence that the US is moving forward and the football pools has stabilised then we could adopt a more positive recommendation,” Batram added.
The facility has an initial debt maturity date of 31 August 2015, which is able to be extended at the group’s request, with the agreement of the lenders, for a further 12 month period. It replaces the group’s previous loan facilities provided solely by the Bank of Scotland, which were due to expire in July 2013 and consisted at the time of refinancing of a £55.5m term loan and a £3m UK working capital facility.