Gaming technology provider GAN Ltd. (NASDAQ:GAN) landed practically needful refinancing with some creditors — moves that will enable the battered unfluctuating to substantiate important savings on one-year interest expenses.
GAN creditor Beach Point Washington is waiving sure defaults and covenants below its stream arrangement with the tech company. The loaner is replacing an interest coverage ratio with a $10 meg liquidity agreement, which testament be tested on a quarterly basis.
Sega Sammy Holdings testament move into an assignment and banker's acceptance correspondence with Beach Point, making it the unexampled creditor on the full term loan, inward improver to lending to GAN an additional $12m to compensate sure fees to Beach Point and for superior general corporate purposes,” wrote Macquarie analyst Republic of Chad Beynon inwards a short letter to clients today.
He also pointed out that Sega Sammy testament pare down the interestingness rate on GAN’s full term loans to 8% from 14%, creating $2 trillion inward yearbook nest egg on stake expenses.
Why It Matters
Formerly GameAccount Network, the troupe provides software-as-a-service (SaaS) solutions for iGaming and sportsbook operators.
GAN went public inwards the US nearly tercet years ago and patch on that point was initial enthusiasm for the stock, that’s long since evaporate as the shares are pull down 64.68% over the yesteryear year. In betimes 2021, the inventory flirted with $32. Today, it labors around $1.60. Following that run, investors will receive any honest intelligence and the credit agreements could help.
“More importantly, we consider this new accord positively, as it removes liquidity and concordat concerns, which we trust were an beetle on the carry recently, and potentially indicates a new strategical partner inward Sega Sammy sledding forward,” added Beynon.
The analyst has an “outperform” rating on GAN with a 12-month price target of $5, import the shares would want to to a greater extent than three-bagger from electric current levels to get there.
GAN Credit Moves Could Help Strategic Review
Earlier this year, Ireland-based GAN announced it is initiating a strategical survey “to judge options useable to hasten our itinerary to best profitability metrics and a more attractive issue profile.”
It remains to follow seen if that results in plus divestments or an outright sales agreement of the company, but GAN’s market place capitalisation of $73.18 1000000 makes it easy digestible for any keep down of prospective suitors. Macquarie’s Beynon observed the aforementioned refinancing moves could goad the company’s strategical brushup outgrowth and the caudex is deeply discounted.
“Moreover, we aspect the business deal as a Florida key world-class step towards a potentiality asset sale. As a reminder, GAN proclaimed the innovation of a strategic survey mental process during 4Q earnings,” concluded the analyst. “At ~$70m marketplace cap, we believe at that place is value inwards recent contracts, embedded tech, the B2C business organisation (following recent write-downs) and iGaming exposure. However, ongoing delays/reductions to the company’s revenue and EBITDA goals get caused shares to languish at well below 1x EV/sales.”
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