By Clyde Mooney
In a confidential deal, Goldman Sachs and a band of hedge funds have purchased NAB’s senior secured credit facilities for National Leisure and Gaming (NLG).
The market reacted to the announcement by stripping nearly 30 percent of NLG’s value.
NLG had enjoyed a brief resurgence for a few months prior, holding around $0.01 throughout the period, when hopes were high for a sale of 20 of its venues.
The first week of February saw NLG’s value double to $0.023, prompting an enquiry by the ASX and a subsequent halt to trading.
Although NLG denied any reasonable explanation for the rallying, it was likely a result of the ongoing review of structural alternatives and capital, and the rumours of an impending sale of NLG's landlord, the Redcape Propery Fund, to Laundy Hotel Group (LHG).
In May Goldman Sachs and its consortium secured 38 percent of Redcape’s senior debt, meaning any ordinary resolution, which requires 67 per cent in favour, would require the investment group’s endorsement.
Now in a position of power for both Redcape and NLG, the US-based investor group is expected to secure a profitable exit within six months.
Market sources have suggested the raiders will seek to make a deal with publicly listed ALE to take the freeholds on the 20 Redcape-owned NLG pubs, but the deal is not looking promising at this stage.
“We are well aware of the Recape portfolio and have looked at it from every angle. It is difficult to see how it might be consistent to what ALE is looking to achieve, however if there were changes in the future we may be interested,” ALE Managing Director, Andrew Wilkinson told TheShout.
The Goldman Sachs group joins Ernst & Young, the receivers of Tom Hedley’s 19.9 per cent, and LHG’s 15 per cent, as NLG’s major stakeholders.
NLG announced on May 30 a new company secretary, with Jennie Yuen replacing Sarah Prince.