TROUBLED pub operator National Leisure & Gaming has slashed its...

TROUBLED pub operator National Leisure & Gaming has slashed its full-year earnings forecast for the third time in less than four months, renewing speculation about the listed group's ability to renegotiate a $200 million bank debt.

NLG has until June 30 to renew its existing financing facilities with the Bank of New Zealand Australia, which is a division of NAB.

But according to analysts, the chances of that happening are less likely after NLG yesterday cut its projected FY08 EBITDA by $3.9 million to only $6 million. The figure is a far cry from November last year when NLG advised the market of an $18.5 million EBITDA. A February downgrade cut earnings to $12.6 million, and in April they fell to $9.9 million.

NLG is one of Australia's largest hotel operators, controlling 39 hotel leaseholds and more than 1000 gaming machines.

The group is also a major tenant of the equally troubled Hedley pub fund.

NLG yesterday cited the cost of refinancing senior debt for its latest downgrade, but also blamed delays in rolling out a capital works program at NSW venues. NLG said this had caused a projected increase in gaming revenue in FY08 to shift to FY09. News of yesterday's downgrade took 0.006c off NLG shares, which closed at only 2c on a trade of just under 1.4 million shares.

Although it owes BNZA $200 million, analysts said, the closing share price valued NLG at about $12 million. Hedley, which leases 32 of its hotels to NLG, shed 5.5c of its share price to close at 85c. In April, embattled Cairns pub baron Tom Hedley, who is the Hedley pub fund's largest investor, decided not to lend $3.8 million to NLG.

Two months earlier, the tycoon was forced to bail out NLG through a $10 million share purchase after a $26.5 million rights issue brought in only $454,000.