Gala Coral has sold nearly 50 of its bingo properties but is to stay on as the tenant and operator of the locations.
Over the last six months, the company’s property subsidiary, 2005 Propco Three, has been actively marketing all of its 60 bingo and eight casino properties. Of those, 47 bingo locations have now been sold to M&G Investments, with a further five properties due to complete shortly. The total consideration for the disposal is £173.4m.
Gala Retail will remain as the tenant in these properties and will continue to operate them. As part of the move, the company has entered into new 25-year leases with M&G and has also made a payment of around £34m to reduce the rent on its bingo properties by approximately between £9m and £15.5m per annum.
The transaction follows the previous sale of two other bingo properties and the sale of eight casinos. The company anticipates that the remaining six properties will be sold in the first quarter of 2015.
Paul Bowtell, CFO at Gala Coral, described the sale as “good news” for the group as it seeks to streamline its financial structure. The move to current market rents on these bingo clubs will “enhance the profitability of the business,” he added.
Gala Coral said it continues to explore the possibility of selling Gala Retail.
