A decision by Intralot's general meeting of shareholders on Monday to increase its share capital and approve the entry of a strategic investor, finally closes a period of uncertainty of more than two years, that threatened even the viability of the gaming management company.
The debt extension achieved in August 2021 and the reduction of borrowing with the agreement of bondholders by 163 million euros gave the company the necessary time to plan for the next day.
The future will find Intralot increasing its capital up to 130 million euros, 125 million of which will be used to repurchase 33.2% of the U.S. subsidiary Intralot Inc. that was exchanged as part of the restructuring of the listed company's debts.
Thus, the parent company Intralot will control 100% of the US company, when the process is completed and will benefit from the operating flows of the company and the dividends to be distributed.
In order for the 130 million euro share capital hike to be implemented, the founder of the company, Sokratis Kokkalis, will fully cover his percentage of 28% after the last reduction of the share capital due to the write-off of own shares, and the American Standard General will participate as a strategic investor.
In particular, Standard General has committed to cover unsold shares up to 1/3 of the share capital, with a maximum price of 0.58 euros per share. Thus, after the increase, the two shareholders will control approximately 60% of Intralot's share capital and will jointly cooperate on its further development.
Yesterday's extraordinary general meeting also gave the green light to determine the disposal price and the right of pre-emption. The company will issue up to 222,000,000 new shares with the offer price expected to be very close to the upper limit (0.58 euros) set by Standard General to cover any unsold shares.
With the capital increase, the parent Intralot will not only repurchase the shares of the US subsidiary, but will also solve the problem with negative equity, so that the stock soon comes out of the surveillance regime.
"We are moving forward with new strengths and prospects", stated Kokkalis during the meeting and described the deal as beneficial for the strategic investor. The next day of Intralot Ιnc, which last year contributed with 70 million euros of operating flows to the consolidated balance sheet, "will be even better", as noted by Intralot's management.
New technologies for customers, ultimately an IPO
The Standard General fund from New York specializes in investments in casino, gaming and media. It is the main shareholder of Bally's Corporation that has 14 casinos in the U.S. and sports betting licenses. Last year it made a $2 billion buyout of the British online gaming company Gamesys. The fund is led by Soohyung Kim.
Intralot Inc. has a presence in 12 U.S. States where it has contracts with local lotteries to provide equipment, technology and to manage them. The next step will be to provide existing customers with e-lottery services, in order to enrich the portfolio of benefits to players.
At the same time, the acquisition of 100% by Intralot simplifies the structure of Intralot Inc, which will have shareholders and bondholders all in one place. The simplified structure leads to greater credibility and better ratings from rating agencies for its creditworthiness. Everything indicates that the next step - not soon - will be its autonomous listing on the US stock exchange.