Nektan has completed the sale of its UK B2C business to Grace Media for a total cash consideration of £200,000 (€236,213/$262,969), as part of an ongoing restructuring effort at the white label and gaming content provider.
The white label and B2C solutions provider saw Mark Phillips and Julie Swan of PCR London appointed as joint administrators of its Nektan Gibraltar (NGL) subsidiary by court order, with the pair finalising the deal. Grace Media, part of the Active Win Group, to pay an initial £50,000 in cash, with the remaining balance is payable subject to the business meeting agreed KPIs.
Nektan said the UK business generated turnover of £19.4m in the 12 months to 30 June, 2018, and was loss-making. Administrators intend to use proceeds from the sale in the course of running the administration of NGL.
According to Nektan, the sale will not have any impact on its ongoing business and, through the deal, it has entered a B2B partnership with Grace Media. This will allow for continued, uninterrupted delivery of services to the UK B2C business with, Nektan to receive monthly royalties from Grace Media.
“For the administrators of NGL to secure the sale of the UK B2C business to a group of the calibre of Active Win Group, in order to see the continued, uninterrupted delivery of the white label operation the group has built over the years, is very reassuring to all stakeholders involved,” Nektan interim chief executive Gary Shaw said.
“We look forward to working in partnership through the B2B relationship with the buyer as they take the business forward.”
Active Win Group chief executive Warren Jacobs added: “The opportunity to acquire the UK B2C business allows Active Win Group to expand further into the UK online casino market, furthering our growth in this market from being a white label operator ourselves, to working with the full complement of business partners established by Nektan in recent years.
“We believe that with the right focus and attention, in a changing and dynamic market, that we will be able to deliver for all our stakeholders, including all of our newly acquired white label partners.”
Meanwhile, Nektan has provided an update on wider restructuring efforts at the provider. As part of the administration process at NGL, Mark Phillips and Julie Swan of PCR London LLP have been appointed as joint administrators to NGL by court order in the High Court of Justice.
This comes after Nektan was last week suspended from trading in London as it failed to publish its accounts before the end of 2019.
The restructuring of the group, according to Nektan, allowed for all other assets of NGL – excluding the UK B2C business – to be transferred for value into other Nektan subsidiaries. Nektan said that this takes all regulatory obligations into account in order to facilitate continued trading, within the group.
Nektan also noted that its restructuring plan, including the sale of the UK B2C arm, has been advised by the GB Gaming Commission. The provider said that it will continue discussions with the GC, should it have any further inquiries in relation to this restructuring.
The restructuring came about after Nektan in September last year revealed that it had an outstanding debt to HMRC in relation to remote gaming duty of £4.6m owed by its UK B2C division. This liability increased to £5.6m as of 30 November, 2019.
Nektan said that following the appointment of administrators, this liability was ring-fenced, thus protecting the provider from any claim by HMRC. However, the business has been working with advisors and administrators in order to develop a repayment plan acceptable to HMRC to allow the liability to be repaid in full.
According to Nektan, with NGL in administration, the repayment of this debt will be negotiated between HMRC and the administrators.
Nektan said this restructuring effort will re-position the business to target new emerging markets with a strengthened balance sheet and cash position. It also noted that ongoing trading will not be affected during this period and that this will facilitate all suppliers being paid in full over time.
“I wish to place on record Nektan's appreciation of the continued support from all of its employees, partners, suppliers and shareholders,” Shaw added.
“The group restructuring reaffirms the directors’ decision to focus on emerging opportunities in international markets both directly and through our established reseller relationships,” he explained. “The completion of our recent fundraising has provided the company with the financial strength to complete this restructuring, and with the support afforded by all stakeholders, the directors are confident of the future.
“The completion of the group restructuring allows Nektan to focus on its expanding international B2C and B2B business.”