£351 million bond repayment should bolster a waning share price
The lacklustre performance of the UK gambling group Ladbroke's shares could receive a fillip in the coming week, when the company repays a £351 million bond - a sign that the company still has cash-generating capability despite its low share price, near £1 billion debt burden and last week's Fitch downgrade of the stock after a miserable May trading statement.
Over the weekend the business section of The Telegraph newspaper reported that the UK gambling sector had been hit by a dramatic fall off in consumer spending that has forced private equity owners to write off their stakes in Ladbrokes rival Gala Coral.
Ladbrokes, which has a total of 2,700 betting shops in the UK and overseas and takes £14 billion in stakes each year, has net debt of £900 million, already down by £87 million from a December 2008 repayment.
The bonds will be paid on July 17 by drawing down cash from a new £500 million bank facility, a Ladbrokes spokesman revealed. The bookie also has an additional loan of £350 million that must be re-paid in 2011 ands £250 million bond with a hefty 7.1% interest charge due in 2012.
This month's bond re-payment will, however, give the group time to refinance its re-packaged debt burden.
Source: InfoPowa News