Intralot Amends Lock-Up Agreement, Agrees $297.5m Loan Facility

Intralot SA released an update regarding a lock-up agreement reached with a group of noteholders in January which was executed having received the required approval by entities holding directly or indirectly the outstanding principal amount of €250 million ($297.5 million) senior unsecured notes due 2021.

New Loan Facility

Intralot agreed on a loan facility with certain members of the group of investors to provide the amount of €147.6 million ($175.6 million) to redeem an equivalent amount of 2021 notes at par and help the company to optimize its balance sheet transactions by way of consensual debt exchange offers.

Intralot SA announced that, with the consent of the 2021 senior unsecured notes holders, it entered into a supplemental indenture to amend certain terms, including changing the minimum denominations and integral multiple of the 2021 notes, the optional redemption notice period, removing the covenant and other amendments.

Intralot and the group of creditors holding in excess of 13% of the €500 million ($595 million) senior unsecured noted due in 2024 agreed in the lock-up agreement in January to a note exchange by way of a consensual debt exchange, under which new senior secured notes to the aggregate amount of up to $244.6 million will be issued.

Stake in Intralot’s US Unit

The new senior secured notes due 2025 will be issued by Intralot, Inc. Group, the US gaming unit of the company which is carrying its operations in other markets such as Mexico, Canada, and the Philippines. Intralot supplies technology and facility management services to lotteries in 12 US states and is pushing up with efforts to expand in sports betting.

The new debt will bear an interest rate of 7.09% in the first 2 years of issuance, 8.19% in the 3^rd year of issuance, and 8.87% thereafter, while the group of investors will also have the option to capitalize interest at a payment-in-kind interest rate in lieu of paying cash interest of 9.98% for the first three years and 10.27% thereafter.

The supplier of lottery and sports betting technology and products was adversely affected by several factors, including contract negotiations in some of its key markets and the impact on the industry from coronavirus-triggered lockdowns and other measures, posting a decrease of 16% in its 2020 full-year revenue.

Seeking to cut its debt, the company initiated last year talks with its creditors among which Beach Point Capital Management, M&G Plc, and Oak Hill Advisors, which led to the January lock-up agreement. The amendments to the lock-up agreement will need the support of at least 90% of the 2021 noteholders to become binding.