Pachinko machine supplier and integrated resort operator Universal Entertainment has set out plans to restructure its notes, effectively pushing back its repayment obligations, in an effort to improve its cash flow and secure liquidity.
The operator will execute an early redemption of its outstanding notes – due in December of this year – which it will finance by issuing new notes with a redemption date three years later.
The value of the early redemption amounts to $118.0m (£84.9m/€98.9m) of existing notes, which were privately placed outside Japan and had been due to mature in December this year but will instead now be redeemed in or around August.
To pay for this, the operator has announced details of plans to issue additional notes outside of Japan. The maximum value of these notes will be $143.0m and will mature on 11 December 2024. The notes carry an 8.5% interest rate per year and will be issued for 102.0% of the principal amount.
Universal Entertainment intends to appoint Union Gaming Securities as marketing agent for the additional notes.
“The early redemption is intended to improve the company’s cash flow and secure its liquidity and assumes issuance of additional notes,” Universal Entertainment said.
“While the company will promptly commence negotiation on the terms of the additional notes with potential investors, the company considers that there will be no major obstacles to the issuance of the additional notes in the current market environment.”
In February, Universal Entertainment reported a 27.3% year-on-year decline in revenue to JPY90.87bn in 2020 after the temporary closure of its Okada Manila resort outweighed growth in the machine sales segment.
