Cherry Casino Group Issues its Own BondPublished July 7, 2016 by Lee R
In an era of economic downturn, an online gambling operator treads on industry stability.
Casino Group Cherry is issuing bonds.
Yes, you heard right, a company which has built its fortune on risking money through heavyweight gambling brands under its umbrella such as Cherry Casino, Euroslots Casino, and Eurolotto is issuing security bonds, the first issue being a four-year senior secured bond of €50 million ($55.8 million) maturing July 11, 2020.
Use of Proceeds
The proceeds from investors will serve to finance the greater portion of a 49% acquisition of the shares in ComeOn Malta, with a future option to purchase the remainder, a transaction which Cherry is looking to complete by the end of the month.
Financing ComeOn Acquisition
The total final consideration for the shares in ComeOn will be paid via a combination of newly-issued shares and cash. The cash part is to be financed with an expansion of the corporate bond, with the price of the new share issue calculated as the volume-weighted average over the fifteen trading days following Cherry’s announced execution of tranche 2 to acquire ComeOn´s remaining 51 percent. This option is exercisable during the period October 1, 2016 to December 31, 2016, as per terms.
The terms of the bond call for a floating rate coupon of Euribor 3 months + 9.00 percent with quarterly payments. The cumulative value of this framework placed at EUR 200 million. Application for listing of the bond on Nasdaq Stockholm is expected within 30 days, with the bond already successfully placed with over 70 investors in the Nordic region.
Cherry CEO Sweet
Cherry CEO Fredrik Burvall asserted his company´s particular delight in gaining interest from Nordic investors. Burvall characterized the interest as an endorsement testifying to Cherry´s success in currying investor trust in the company´s new-found access to the corporate bond market, raising the credibility not only of Cherry as an organization, but in its pending acquisition of ComeOn and overall business model.
Who Woulda Thunk
Who knew gambling could yield such security?