Amaya to pay off PokerStars purchase without issuing shares

 Amaya has agreed a deal that will allow it to avoid issuing shares to pay the remaining $197.7m (£163m) it owes for the purchase of Rational Group in August 2014.

The payment was due 1 February, but Amaya said yesterday a new deal had been worked out with the former owners to allow it to pay the balance over the course of 2017 using cash flow from operations and reserves.

In return for the extended timeframe, the former owners – the Oldford Group led by Mark Scheinberg –  will receive three months of late payment fees on 1 February, as well as potential additional late fees on the outstanding balance beginning on 1 May.

Amaya said the agreement was the “least expensive and most flexible financing option at this time” as it avoided incurring additional term debt, amendment fees and associated costs and expenses.

The plan also means Amaya won’t have to issue further shares in the company to pay off the debt – an option which Oldford could have enforced under the terms of the original sale.

“We believe that our current plan speaks to the strong cash flow generation of our business model and will allow us to continue investing in the success of our business while meeting our pre-existing contractual obligations to the former owners,” said Rafi Ashkenazi, Amaya CEO.

“Based on our operations and performance in 2016, we are confident in our ability to repay the balance of the deferred purchase price in a timely manner.”

Amaya projects 2016 revenues between £930m and £950m with adjusted net earnings of £283m to £291m.