Some investors in German gaming group Lowen Play’s €350 million bond are holding initial talks with financial and legal advisors about the upcoming maturity of the company’s 2022 notes, sources told Reorg. The bondholders have not organized as it is still unclear whether the company requires additional liquidity ahead of the maturity or on the sponsor Ardian’s plans for the business, sources commented.
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Lowen Play is working with Rothschild and Latham & Watkins on the refinancing of the €350 million bond due 2022. The mandate was secured initially for debt advisory work though this is subject to change, as
reported.
During its most recent call with investors on May 20, the group’s management
said it was considering refinancing options for its bond but could not give a specific timetable, adding that it would initiate discussions when the time was right. Management said that it was taking several factors into account, including the timing of the recovery from the Covid-19 pandemic.
The company said in its full-year
report that “it will more likely than not have sufficient liquidity” based on the assumption that all gaming arcades will open on July 1. This is based on initial monthly revenue of between €14.2 million and €17.2 million after reopening of arcades on July 1, the group added. Lowen Play also recently confirmed that it has received €30.4 million in state aid in April for November 2020 and December 2020 and that it expects to receive approval for the additional aid of €12 million for January by June.
The sponsor has held the company for more than 10 years after acquiring it in April 2008. The group used the proceeds from the €350 million 2022 bond issuance to make a shareholder distribution of €198.4 million. Some investors have speculated that Ardian could seek to sell part of the business to another investor to support the refinancing.
Given the current developments and conditions due to the Covid-19 pandemic, Lowen Play told investors recently it expects to report a similar result in 2021 as in 2020.
In full-year 2020, the group reported revenue of €182.9 million and pre-IFRS 16 EBITDA of €28.5 million (Post-IFRS 16 EBITDA of €54.8 million). If the gaming arcades do not reopen until July, the Safari Group expects revenue of around €110 million to €120 million and an IFRS EBITDA of about €5 million to €10 million in 2021.
Lowen Play’s capital structure is below:
Lowen Play GmbH
|
12/31/2020 |
|
EBITDA Multiple |
(EUR in Millions) |
Amount |
Price |
Mkt. Val. |
Maturity |
Rate |
Yield |
Book |
Market |
|
€40M Senior Secured RCF 1 |
40.0 |
|
40.0 |
Aug-2022 |
E/L + 2.750% |
|
|
Total Super Senior RCF |
40.0 |
|
40.0 |
|
0.7x |
0.7x |
€350M Senior Secured "Safari Verwaltungs" Notes |
350.0 |
95.4 |
333.8 |
Nov-30-2022 |
5.375% |
7.974% |
|
Total Senior Secured Bond |
350.0 |
|
333.8 |
|
7.1x |
6.8x |
Leases |
164.5 |
|
164.5 |
|
|
|
|
Total Leases |
164.5 |
|
164.5 |
|
10.1x |
9.8x |
Subordinated Shareholder loan |
183.4 |
|
183.4 |
|
|
|
|
Total Shareholder Loan |
183.4 |
|
183.4 |
|
13.5x |
13.2x |
Total Debt |
737.9 |
|
721.7 |
|
13.5x |
13.2x |
Less: Cash and Equivalents |
(78.6) |
|
(78.6) |
|
Plus: Restricted Cash |
12.5 |
|
12.5 |
|
Net Debt |
671.8 |
|
655.6 |
|
12.3x |
12.0x |
Operating Metrics |
LTM Revenue |
182.9 |
|
LTM Reported EBITDA |
54.8 |
|
|
Liquidity |
RCF Commitments |
40.0 |
|
Less: Drawn |
(40.0) |
|
Plus: Cash and Equivalents |
78.6 |
|
Less: Restricted Cash |
(12.5) |
|
Total Liquidity |
66.1 |
|
Credit Metrics |
Gross Leverage |
13.5x |
|
Net Leverage |
12.3x |
|
Notes:
Restricted cash refers to cash in cash boxes and tube filling. LTM EBITDA is the reported EBITDA post IFRS 16.
1. The group fully drew the RCF on March 24, 2020. Notes & RCF pari passu, in enforcement RCF is super senior. RCF has a leverage covenant of 4.67x tested quarterly under certain circumstances. Interest rate on RCF subject to reduction. |
--Aurelia Seidlhofer, Luca Rossi