14 February 2005 – LAWFUEL – The Law News Network – Linklaters are advising Merrill Lynch International, The Royal Bank of Scotland plc and Intermediate Capital Group plc on the £1.025 billion recapitalisation of the buyout of Gala Group Limited, the bingo, casino and online gaming company.
The new facilities are to refinance the existing senior and mezzanine facilities of Gala Group Limited undertaken as part of a tertiary LBO in February 2003 and to allow the payment of a substantial dividend to the funds of the equity sponsors, Candover and Cinven.
As part of the recapitalisation, the existing capital structure has been changed to insert a second lien facility between the senior term loans A/B/C and the mezzanine facility. Such second lien facilities are part of a growing trend in the European market over the last 12 months as are recapitalisations which are also currently seen by sponsors as an effective way to recover all or part of their original equity investment.
Significant security is being granted by Gala Group in the UK and over 300 financial assistance statutory declarations were required to be sworn within a short timetable as part of the process of taking security.
The Linklaters team was led by Gideon Moore in London, assisted by Derek Hayward and Nicola Wong. Kirsty Corkum provided real estate advice.
Gideon Moore commented:
“It is a pleasure to be involved in the recapitalisation by Candover and Cinven of the existing Gala Group capital structure. Like a number of our other recent deals, such as the recapitalisation of Bertelsmann Springer, a second lien facility has been inserted between the senior and mezzanine facilities and reflects a growing trend in the sponsor-backed leveraged finance market.”