When the chips are down

22 October 2009 By Una Galani Follow @ugalani

Candover, Cinven and Permira piled leverage onto the UK betting firm when they became its third set of privateequity owners after the 2003 buyout. Gala now faces a complex restructuring; but the mooted plan will leave it with heavy debts and betting on an earnings turnaround.

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Gala Coral chairman Neil Goulden said on October 23 that he expects the betting firm to agree a restructuring deal in the coming months and avert a potential default on its £2.7bn of net debt.

Mezzanine lenders, led by Intermediate Capital Group and Park Square, have offered to restructure their debt in exchange for around half of Gala's ordinary shares and management control. Gala has £500m of mezzanine debt and £2.2bn of senior debt.

Candover and Cinven invested £550m equity to buy Gala in 2003 from Credit Suisse First Boston Private Equity. Permira bought a 30% stake in August 2005, valuing Gala at £1.9bn. Two months later Gala bought Coral Eurobet.

Candover, Cinven and Permira are Gala's third set of private equity owners.

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