GGRAsia – Scientific Games, lenders agree on credit facility amendment

Scientific Games, lenders agree on credit facility amendment

Oct 09, 2020 Newsdesk Industry Talk, Latest News

U.S.-based gaming equipment manufacturer Scientific Games Corp says the group has reached a deal with its lenders to amend an existing revolving credit facility agreement.

The latest amendment further extends the covenant relief period for an additional three quarters from March 31, 2021, according to a filing on Thursday.

As a result, the group’s subsidiary Scientific Games International Inc “is not required to maintain compliance with the otherwise applicable consolidated net first lien leverage ratio covenant” during the relief period.

According to the filing, the revised consolidated net first lien leverage ratio will now be set at 6 times consolidated earnings before interest, taxation, depreciation and amortisation (EBITDA), beginning with the fiscal quarter ending March 31, 2022. Such ratio will sequentially step down to 4.5 times consolidated EBITDA beginning with the first quarter of 2024 and thereafter, said Scientific Games.

The group had already negotiated an amendment to the same facility in May this year, which imposed a minimum liquidity requirement of at least US$275 million. Such requirement excluded SciPlay Corp, a subsidiary and business segment of Scientific Games.

A number of gaming equipment suppliers and casino operators have in recent months announced fresh debt issuance exercises or the amendment of existing credit facilities, to help them face the financial challenges posed by the negative impact on business from the Covid-19 pandemic.

In July, Scientific Games reported a net loss of US$203 million for second-quarter 2020, on revenue that fell by 36.2 percent year-on-year, to US$539 million.

On September 14, United States-listed Scientific Games announced that control of the group was changing hands, with the sale of a 34.9-percent stake – that had been held by financier Ronald Perelman – to other parties including Caledonia, a global investment firm that had also at some stage been an investor in the Australian slot machine brand Aristocrat

Tim Throsby, a former chief executive at United Kingdom-based Barclays Bank Plc, was appointed last month as an independent director of Scientific Games, with effect from October 1.