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Light & Wonder Cuts Debt By 4.4 Billion Dollars

Posted on April 19, 2022 | 4:10 pm

Light & Wonder, the renowned American provider of gaming products and services, has announced that the corporation’s debt has been reduced dramatically following the company’s recent moves.

The American provider went through a series of debt refinancing transactions following the money it gathered from the recent sale of its lottery business. Earlier this month, Light & Wonder announced that it completed the sale of its lottery business Brookfield Business Partners, a private equity company Brookfield Business Partners, a subsidiary of Canadian financial services giant Brookfield Asset Management Incorporated.

The decision to sell the lottery business came after a strategic review of the corporation’s activity, which concluded that the company has to reduce its debt and focus on developing casino games instead of being active in lotteries and sports betting as well.

The sale of the lottery business generated 5.8 billion dollars for Light & Wonder, and 4 billion of that money was used to retire a term loan. The company also redeemed secured and unsecured notes worth 3 billion dollars, while getting a new term loan facility amounting to 2.2 billion dollars. Moreover, the American company entered into a new revolving credit facility of 750 million dollars.

The bottom line is that the corporation’s debt has been reduced from a total of 8.8 billion U.S. dollars to just 4 billion dollars, taking the company’s net debt leverage ratio from 6.2x to just below 3.9x. The final purpose is to take that ratio somewhere between 2.5x and 3.5x. Light & Wonder has also managed to reduce its annual interest payments by 225 million dollars.

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Looking To Transform The Business

Barry Cottle, the Chief Executive Officer of Light & Wonder, revealed that the company is committed to executing the strategy that was set up following last year’s review, and with the sale of the lottery business that process has “made rapid progress”.

Light & Wonder has been known for many years in the gaming industry as Scientific Games but the company decided to switch to the new brand earlier this year. At that time, the American giant announced that the new name would better reflect the group’s future perspective and shift towards focusing on gaming services.

The company’s sports betting business is also up for sale, possibly generating more funds as Light & Wonder aims to become “a leading cross-platform global game provider”.

Last year the company completed the acquisition of ELK Studios, a creative games developer from Sweden, along with slot developer Lightning Box and live casino provider Authentic Gaming.

Source: “Light & Wonder Announces Successful Completion of Debt Refinancing Transactions, Delivering on Promise to Transform the Balance Sheet“Light & Wonder. April 14, 2022.

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