More detail of the loan settlement...sound like a good deal to me!!!!
Your round: National Leisure makes a dealVanda Carson
THE ailing listed pub operator National Leisure and Gaming has paid off one of its major creditors for an estimated 10c in the dollar as part of a plan to clean up its capital structure.
The deal to pay Tom Hedley an estimated $1.5 million to buy out a $15 million mezzanine debt facility was announced yesterday. It effectively gives the New Zealand arm of National Australia Bank, which is owed $185 million, control over National Leisure.
Aside from NAB, Mr Hedley's company TWH (Qld) was the only other lender to National Leisure.
Its chief executive, Andrew Jolliffe, said he could not disclose how much the company had paid to settle the $15 million debt facility with Mr Hedley. However, the Herald understands Mr Hedley, 58, was willing to accept as little as 10 cents in the dollar.
The funds came from the sale of the leasehold to two Queensland pubs to Australian Leisure and Hospitality, Woolworths' hotel and gaming joint venture with the hotelier Bruce Mathieson.
National Leisure is a major tenant of pub landlord Hedley Leisure and Gaming Fund, of which Mr Hedley is the majority shareholder. It leases more than 30 Hedley Leisure-owned hotels, most of which are in NSW, which has been hit hardest by falling poker machine, food and beverage revenues.
In February at the company's half-year result, National Leisure's net tangible asset backing per security sank to minus 34c. It had $237 million worth of assets and $217 million worth of liabilities as at December last year, giving it net assets of just $19.5 million.
Shares in National yesterday closed unchanged at 0.7c.
Mr Jolliffe told the Herald that the move would strengthen the company's capital structure "to enable the company to move forward". He said the loan from Mr Hedley was paying a higher interest rate than its debts to NAB.
"From National Leisure's perspective, it's very positive to be able to remove from its capital structure its mezzanine facility. It's one of a number of strategic initiatives that the company will embark on … with the support of the bank."
NLG Price at posting:
0.9¢ Sentiment: Hold Disclosure: Held
