By Ian Neubauer
Troubled pub-operator national Leisure Group (NLG) remains in the hot seat this week after the company failed to secure $3.8 million in debt funding from TWH, a company owned by Queensland pub baron Tom Hedley.
NLG had previously announced to the Australian Stock Exchange (ASX) it intended to use the $3.8 million to reduce its level of gearing under its current financing facilities with Bank of New Zealand Australia.
However, negotiations between NLG and TWH broke down on Friday following developments at Hedley Leisure Gaming Fund (HLG) that last month saw the value of its shares halved, a series of trading halts and a temporary suspension from the stock exchange. TWH is the majority shareholder of HLG.
Last week NLG downgraded its projected earnings for 2008 from $12.6 million to $9.9 million as a result of the increasing cost of refinancing debt and protracted refurbishment costs. NLG neglected to prepare its properties in time for the introduction of smoking bans last year and continues to suffer losses in gaming revenue across Queensland and NSW while refurbishments are underway.
NLG’s portfolio spans 39 leasehold hotels and 1006 gaming machines.
NLG shares were trading at 2.9 cents at 4:00pm today.