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PartyGaming must negotiate a new loan facility

Wed, 4 Oct 2006 , InfoPowa Send page to friend Bookmark page Smaller font Larger font Printer friendly

PartyGaming must negotiate a new loan facility with its banks within 30 days of U.S. President George W. Bush signing into law a bill to crackdown on Internet gambling, the British newspaper The Financial Times reported this week.

A clause in the online gaming company's $500 million (GBP 265 million) loan agreement allowing its lenders to call in the loan in the event of an alteration in U.S. law that affects PartyGaming's position in the country prompted the condition.

PartyGaming is apparently relaxed about the negotiations, and said it would be reviewing its banking requirements. The firm said earlier this week that it was canceling its interim dividend following a decision to suspend all gaming business with U.S. players in the face of the new legislation.

PartyGaming has not yet suspended it's US customers but will do so when Bush signs the new gambling law. The company released the following update to the London Stock Exchange:

"After taking extensive legal advice, the Board of PartyGaming Plc has concluded that the new legislation, if signed into law, will make it practically impossible to provide US residents with access to its real money poker and other real money gaming sites. As a result of this development, the Board of PartyGaming has determined that if the President signs the Act into law, the Company will suspend all real money gaming business with US residents, and such suspension will continue indefinitely, subject to clarification of the interpretation and enforcement of US law and the impact on financial institutions of this and other related legislation. Access to PartyGaming's online gaming sites for the Group's US free play customers will be unaffected. Access for all of PartyGaming’s non-US customers will also be unaffected."

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