Leading British betting and gaming firm William Hill plans to raise approximately £350 million in a rights issue to refinance its debt, which is part of a wider plan to restructure the group’s £1.2 billion in borrowings.
According to a piece in The Sunday Times newspaper, the move is likely to be fully underwritten by Citigroup, William Hill’s financial adviser and broker, and announced this Friday alongside the firm’s annual results.
The fundraising would see the bookmaker scrap its dividend, which would save it about £70 million, with investors seemingly ready to give the rights issue plan the thumbs-up.
“William Hill is a good business,” said a ‘big shareholder’ quoted by The Sunday Times.
“A rights issue at that sort of level should be quite well received. We would be supportive of it.”
William Hill’s current lending arrangements expire in March of 2010 but its banks, which include Barclays, HSBC and RBS, are expected to agree new facilities although it is not yet clear what terms, if any, have been agreed.
In a statement issued on January 15, William Hill revealed that its gross win had risen eight percent over the previous eleven weeks against a year earlier and investors may also have been reassured by a steady set of financial results from rival Ladbrokes released earlier this week.