Amaya reveals financing plan for deferred Rational payment
Amaya has announced its financing plan for the balance of a deferred payment in relation to its acquisition of Rational Group in August 2014.
Due on February 1, the amount stands at approximately $197.7 million (€186.6 million).
In a statement outlining its plans, Amaya said it will pay the remaining amount over the course of this year from unrestricted cash on its balance sheet and cash flow from operations.
The decision comes after the company evaluated “multiple non-dilutive options”, concluding that this approach is the “least expensive and most flexible financing option” as it avoids measures such as additional term debt, amendment fees and associated costs and expenses.
Rafi Ashkenazi, chief executive of Amaya, added: “We believe that our current plan speaks to the strong cash flow generation of our business model and will allow us to continue investing in the success of our business while meeting our pre-existing contractual obligations to the former owners.
“Based on our operations and performance in 2016, we are confident in our ability to repay the balance of the deferred purchase price in a timely manner.”
In connection with the current plan, Amaya has secured a deal with the former owners of Rational whereby the latter have agreed not to enforce, during 2017, a right to cause Amaya to use commercially reasonable efforts to issue equity to finance any outstanding balance of the deferred purchase price.
Also in reference to part of the original merger agreement, the former owners have agreed to not enforce the payment of the deferred purchase price prior to the maturity or repayment of the acquisition financing
In November last year, Amaya paid $200 million of the deferred purchase price, which resulted in savings of approximately $2.3 million on the total balance.
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