NorthStar Gaming confirms long-term debt financing deal worth C$43.4m
Canada-based operator has detailed the reasons behind the agreement to include plans to repay C$9.5m plus interest debt to partners Playtech
NorthStar Gaming has announced it has a secured a long-term debt financing deal worth C$43.4m ($30m) with Beach Point Capital Management.
The agreement, which is subject to final approval from the TSX Venture Exchange, includes a maturity date of January 24, 2030, and will see payment deferred for the first 30 months. From there, NorthStar Gaming will pay 2.5% of the principal amount per annum until the 42nd month of the agreement, followed by a rate of 5% per annum thereafter until the maturity date.
The Canadian operator has shed light on the reasons behind the debt financing agreement, citing support of the firm’s “continued growth” as one factor, alongside plans to repay the C$9.5+m accrued interest loaned to NorthStar by Playtech in three separate instalments across 2024.
There are also plans to use the C$43.4m debt financing for “working capital and general corporate purposes,” as well as a C$7m fund for an interest reserve account.
In addition to funds from Beach Point, NorthStar has also received credit support from Playtech and its subsidiaries for “certain obligations under the credit facility.”
Both NorthStar and Playtech have provided guarantors to meet the obligations of the agreement, while NorthStar has issued 32,735,295 common share purchase warrants at a price of C$0.055 per share to Playtech, in consideration of the guarantors providing the Playtech guarantee.
The share price reflects around an 8.70% premium to the five-day volume-weighted average price of the common shares of the NorthStar on January 24, 2025.
The issuance of the shares will be considered a “related-party transaction,” with Playtech having been a multichannel partner of NorthStar since 2022.
Norton Rose Fulbright Canada LLP served as legal counsel for NorthStar, while Kirkland & Ellis LLP and Goodmans LLP acted in the same capacity for Beach Point.
Michael Moskowitz, NorthStar CEO and chair, talked up the importance of the agreement.
He said: “This is a pivotal moment for NorthStar, marking the largest financing in our history. This credit facility strengthens our balance sheet and directly supports our ability to scale operations and drive the business towards profitability with a single-minded focus.
“We are grateful to Beach Point Capital Management for their trust in our strategy and vision. We are also thankful for Playtech’s steadfast partnership, which was instrumental in securing this funding, reinforcing their value both strategically and as a technology provider.”
Gabriel Fineberg, Beach Point managing director, added: “Beach Point has deep experience investing across the gaming sector and is excited to partner with NorthStar to support their strategic initiatives.
“The online gaming sector has been growing rapidly, and this investment reflects our confidence in the company’s leadership, market potential, and ability to deliver long-term sustainable growth.
“Likewise, we value the partnership with Playtech, who are contributing their leading technology, global reach, and strategic vision towards NorthStar’s continued success.”