BESIEGED pub operator National Leisure & Gaming has received a year-long stay of execution from National Australia Bank.
NLG had been due to repay around $200 million in loans that expired yesterday, but in a deal negotiated on Friday the loans, owed to NAB subsidiary BNZ Australia, were extended until July 31, 2009.
With no buyers for the troubled hotel group, sources said, NAB had no option but to allow NLG to continue trading.
"All the presumed buyers have gone," one said. "The only upside for NLG is that they should outlast the Hedley group. What's apparent now is that the banks are the biggest owners of hotels in Australia."
Despite being one of Australia's largest hotel operators, as well as the largest listed specialist hotel and gaming operator, NLG's business and share price have been hit by NSW smoking bans, negative sentiment towards poker machines and falling hotel values.
A month ago NLG was forced to slash its full-year earnings forecast for the third time in less than four months with projected 2008 financial year EBITDA of only $6 million.
NLG, which controls 39 hotel leaseholds and more than 1000 poker machines, recently sold a Port Macquarie tavern leasehold for $2.4 million to reduce debt.
The group leases 32 hotels from the Hedley pub fund, which was also back in the news yesterday when its share price fell more than 12 per cent because of industry concerns about the role anti-pokies independent Senator Nick Xenophon will have in the reshaping of the sector.
Hedley closed down 9c at 64c. NLG's nearly annihilated share price was up by 0.4c to 2.3c.
In other MFS news, fine tuning of the Packer family bid for Living & Leisure Australia is believed to be behind the latest trading halt for the former MFS offshoot. LLA is expected to remain in a halt until tomorrow.
NLG Price at posting:
0.0¢ Sentiment: None Disclosure: Held
