As reported by the Financial Times, the world\’s largest online poker company will have to negotiate a new loan facility with its banks as a clause in $500 million loan agreement allows its lenders to call in the loan in the event of a change in US law that materially affects the firm’s position in the US.
While a spokesman for PartyGaming said the re-negotiation is not an issue as the loan was actually a revolving credit facility, which the company can use according to its needs, a broker note from ABN Amro warned that the online poker company is likely to need funds to exit the US for restructuring and redundancies.
PartyGaming, whose market value fell from £4.3 billion on Monday to £1.6 billion today, is also in line to be relegated from the FTSE 100 Index at the next reshuffle in December.
In separate news, PokerStars, the world\’s second-biggest online poker company after PartyGaming, has shelved plans for a £1.6bn London floatation early next year. The company, advised by HSBC and Dresdner Kleinwort, said it will not try to get to market before 2008.
In Toronto, ESi Entertainment, owner of Citadel Commerce, took a battering and dropped 52% of its market value in the last two days.
Elsewhere, Fidelity Investments, a mutual fund company, emerged as a major casualty of the US clampdown on internet gambling. The total value of Fidelity’s funds has collapsed by about £270m in the past two days.
Financial website ADVFN complied a basket of 30 publicly-listed online gambling shares showing that their combined value has plummeted by £5.3bn since July 14 when the former BetonSports\’ Chief Executive David Carruthers was arrested.
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