Gala Bingo's parent company, Gala Coral, has had its supplier insurance cover removed.
Suppliers to Gala Bingo have been told that they are no longer insured against the company going bust or into liquidation after credit insurer Euler Hermes suddenly withdrew the cover.
Drinks and food companies, free bingo ticket printers and slot machines manufacturers are likely to feel less comfortable about supplying to Gala Bingo and other Gala Coral businesses, including the Gala Casino chain and Coral betting shops, following the decision.
Gala Coral told the Financial Times that Euler Hermes' decision was “appalling behaviour” and came about as a result of their worry that many private equity-backed deals were struggling to meet huge debts.
The newspaper said sources close to Euler Hermes said the withdrawal of cover was linked to Gala Coral's debt problems and refusal to supply information.
Gala Coral has net debt of £4.3bn, and last year made a pre-tax loss of £397m. Its financial backers were forced to give the company an extra £125 million to prevent it from breaching debt covenants.
Neil Goulden, chairman of Gala Coral, said: “We have had absolutely no contact with Euler Hermes at any time. This is random targeting of private-equity companies, which is appalling behaviour by them, and the government should do something about it. We pay all of our suppliers on time. We are totally solvent and have £125m of cash in several banks.”
A gaming analyst told Bingo News: “Credit insurers didn't seem to mind taking the premiums when the economy was good and default levels were low. Now things are not so rosy they seem to be incredibly risk averse. It feels slightly like they are having their cake and eating it.”
News Sources:-
Posted by Debbie Archer on 3 February 2009
http://www.bingonews.com/1881/gala-bingo-insurance-cover-removed/?lang=all
Suppliers to Gala Bingo have been told that they are no longer insured against the company going bust or into liquidation after credit insurer Euler Hermes suddenly withdrew the cover.
Drinks and food companies, free bingo ticket printers and slot machines manufacturers are likely to feel less comfortable about supplying to Gala Bingo and other Gala Coral businesses, including the Gala Casino chain and Coral betting shops, following the decision.
Gala Coral told the Financial Times that Euler Hermes' decision was “appalling behaviour” and came about as a result of their worry that many private equity-backed deals were struggling to meet huge debts.
The newspaper said sources close to Euler Hermes said the withdrawal of cover was linked to Gala Coral's debt problems and refusal to supply information.
Gala Coral has net debt of £4.3bn, and last year made a pre-tax loss of £397m. Its financial backers were forced to give the company an extra £125 million to prevent it from breaching debt covenants.
Neil Goulden, chairman of Gala Coral, said: “We have had absolutely no contact with Euler Hermes at any time. This is random targeting of private-equity companies, which is appalling behaviour by them, and the government should do something about it. We pay all of our suppliers on time. We are totally solvent and have £125m of cash in several banks.”
A gaming analyst told Bingo News: “Credit insurers didn't seem to mind taking the premiums when the economy was good and default levels were low. Now things are not so rosy they seem to be incredibly risk averse. It feels slightly like they are having their cake and eating it.”
News Sources:-
Posted by Debbie Archer on 3 February 2009
http://www.bingonews.com/1881/gala-bingo-insurance-cover-removed/?lang=all
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