Nektan Sells Respin Stakes to Alternative Investment Partners

Nektan Sells Respin Stakes to Alternative Investment Partners

Gibraltar-based gaming platform and services provider, Nektan, announced that it sold a 57.7% stake in its US subsidiary, Respin.

The majority of the company’s stake is sold to Alternative Investment Partners Limited (AIP) for $391.680.

Nektan officials have been discussing this acquisition for the past couple of months…

…but haven’t revealed the names of the companies that were a part of these discussions.

More on the Deal

This brand-new deal with AIP also includes the provision of $800,000 in working capital to Respin, which is quite different from a £2m cash fee and £300,000 in working capital that the provider had previously announced.

Nektan, who recently integrated its E-Lite platform with Bede, maintains that the main reason behind making the changes in of the deal with AIP…

…is actually a result of the original proposed purchaser not being able to complete the transaction in the required time period, while the new buyer renegotiating fresh .

A Word from the CEO

“The majority sale of our US subsidiary allows Nektan to retain a material stake in the emerging US market without funding it on an ongoing basis. We look forward to continuing to work closely with Respin as we firmly believe in our US mobile casino product,“ CEO of Nektan, Lucy Buckley, said.

“As previously announced, Respin has steadily been gaining traction in the US, g deals with some of the biggest land-based casinos in the world and we are excited about the macro trends in the market,” she added.

“Removal of the cash burn of the US business will allow Nektan to focus on the profitability of its core European business and continue to grow the company globally,” she concluded.

Results of the Sale

A certain number of other inter-conditional transactions have been confirmed once again and company officials expect to complete them by April 30 of this year.

These include a credit-linked note conversion, equity placing, and subscriptions…

….and if those transactions go as expected, the company will have enough money to fund its current operational requirements.

On the other hand, Nektan said that it is still negotiating with the UK tax authority, HMRC, about a point of the consumption tax bill of around £3.6m that is due at the end of April.

If this discussion doesn’t go as planned, the company will have to raise additional funding.

Increase in Revenue

Right at the beginning of this month, Nektan officials reported a 5.9% year-on-year increase in revenue for the third quarter of the year.

They pointed out that the company’s performance in that period was actually impacted by various different factors.

While the revenue for the first three months of 2018 was up from £5.1m in the prior year to £5.4m, it also represented a 15.6% decline from the second quarter of the current financial year.

The officials said this happened as a result of different factors…

…like seasonality, tighter UK regulations around player marketing and verifications and a delay in its Swedish operating license being granted.

Nektan only released figures on the revenue, staking and customer numbers in its trading update, while it didn’t reveal the update on its overall performance.

Source:

“Nektan sells Respin stake to Alternative Investment Partners”, igamingbusiness.com, April 17, 2019.

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