Playtech’s recent choice to sell off its 9.99% stake in the online trading platform Plus500 has come as no surprise, considering the firm’s recent bid to refinance its debt to fund its recent purchase of Snaitech, according to iGaming industry analysts.
In a regulatory report filed last week, the developer noted that the sale would bring in gross proceeds of around £176 million (€196m/$228m), which are seemingly much needed at the moment. The Isle of Man-based company reportedly plans to use these earnings for ‘general corporate purposes and debt reduction’, according to its own manifesto on the subject.
Stake Purchasers Still Anonymous
Just a few days ago, the founders of Plus500 revealed their plans for a share sale worth more than £145 million at the same price of £15.50 a share, reducing their shareholders by half to around 8%. This is apparently due to a bid to diversify the trading firm’s investments, while also raising fund for what it termed ‘personal reasons’ and ‘significant demand from institutional investors’.
The two aforementioned announcements were totally unrelated as well, with the purchases and sales involving different brokers. With that said, the identities of the purchasers of the stakes previously held by Plus500’s five founders (namely Omer Elazari, Elad Ben-Izhak, Alon Gonen, Gal Haber and Shlomi Weizmann) and Playtech have not yet been publicly revealed.
Finer Details of Deal Coming Soon
According to Goodbody Gaming and Leisure analysts, the news has come as ‘no surprise’, noting that ahead of its upcoming refinancing of more than €1 billion in debt to fund its Snaitech deal, Playtech had adjusted gross cash of around €563 million by the end of H1 this year. Only €350 million of this is available to reduce its debts, and it has been suggested that the Plus500 stake sale could further slash the levels of debt required by the pending deal.
Goodbody also revealed that the finer details of the Snaitech deal are expected to be revealed in coming months. Earlier in August, Playtech revealed a concerning 38% year on year decrease in its adjusted net profits to €83.3 million in H1, while the company’s EBITDA also fell by 13% to €145 million.
The company’s acquisition of Snaitech, the largest sports betting operator in Italy, was finalized at the beginning of last month, and has been partially credited with the UK developer’s falling revenues and current debt refinancing moves.