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Gala Coral seized by mezzanine lenders

GAMBLING outfit Gala Coral became one of the highest profile private equity blow-ups yesterday as its buyout owners lost control of the business in a debt-for-equity swap.

Permira will write down £370m on the deal, while Candover and Cinven will write down £150m apiece, it is understood. Mezzanine debt holders who bought into the company earlier this year -- led by Apollo Management, Cerberus, Park Square and York Capital Management -- will swap their £558m holding for equity and pump in a further £200m to help bring net debt down to £1.9bn.

Gala Coral chief executive Neil Goulden said: “Everyone believes it is the best offer on the table and everyone agrees it is the best thing for the company.”