Amaya Gaming, an online Canadian gambling operator, purchased PokerStars for $4.9 billion back in 2014 and still owes a bit of money back to the previous owners of the company. This week they announced that they have outlined an agreement between themselves and the previous owners of PokerStars Isai Scheinberk and his son Mark Scheinberg in order to settle the remaining 197.7 in deferred payments that must be paid off by Amaya. This deal comes just before the date that was set for the remaining payments from the Rational Group LTD sale that was set for February 1st.
The Scheinbergs had previously owned both Full Tilt Poker and PokerStars before selling it off to Amaya, whose interest peaked in the companies when they had become quite popular in the world of online gambling. When the agreement had been settled Amaya had to pay $4.5 billion of the total amount up front, but still had to owe a remaining balance of $400 million that had to be paid off by February 1st of 2017. With this date being right around the corner and Amaya still owing almost half of what they had originally owed, it was clear that they were not going to make the deadline. This is why it was necessary to come to an alternative agreement rather than getting tied up in the court system over it.
About two months prior to this agreement Amaya had released an announcement that stated that they had half of their owed debt in cash, but had not fully gained the remaining balance and were looking for alternative means to gather it. In their recent press release the company stated that their remaining debt would be paid off using unrestricted funds and through revenue earned by their various platforms.
In order for this agreement to move forward, the previous PokerStar owners had to affirm that they would not use legal measures in order to push Amaya into paying off their remaining debt through the usage of “commercially reasonable efforts” which would bring in an issuance of equity. The exchange for this is that Amaya is going to pay the two a set amount of late payment fees prior to February 1st. They will also be held responsible for even further fees if they do not uphold their end of the bargain.
This is a great deal on Amaya’s part because it is going to keep them out of the courts and prevents them from being ordered to pay interest on remaining amounts. This is one of the few good things that have happened for the company as of recently. They’ve had to deal with their former CEO facing charges related to insider trading and they’ve had merge deals fall through with William Hill. Perhaps this is the start of a great new year for the company as they turn their recent bad fortune around in 2017 and spread their brand out further.
