Gambling Firm Could Be Broken Up To Service Debts

Report suggests chief lender is preparing to break up major gambling group.

Gala Coral is facing an uncertain future after the Royal Bank of Scotland (RBS) revealed plans to raise cash for the indebted gambling group by selling off parts of the business.

According to the Observer, RBS is the group's leading lender and has already approached potential investors with an invitation to bid for one of its bingo, casino or sports betting operations.

"The company needs to address its debt burden and is considering a number of options to raise cash," the bank states in a presentation viewed by the newspaper.

Owned by the private equity groups Candover, Cinven and Permira, Gala Coral currently has about £2.7 billion of debt and is due to repay £80 million to its lending banks by September.

However, the group itself has denied claims that it is seeking to offload certain divisions, although it has begun a process of restructuring.

"We are not looking to sell off assets or break up the group. We have £200 million on the balance sheet and we are not seeking an equity injection," a Gala Coral spokesperson told the Observer.

Gala Coral owns 156 bingo clubs, 27 casinos and nearly 2,000 sport betting shops.