Russian gambling chain raised $45 million
Russian growing market fuels gambling companies
Russian gambling company Ritzio Entertainment Group, which runs a large chain, announced that in 2004 it raised $45 million to refinance its existing debt and to buy new slot machines after a sale of notes linked to its credit.
The company was planning to expand its business in the country. Therefore it received the money as a one-year loan from Dresdner Bank AG, which Moscow-based MDM Bank then bought and later sold as bonds to mainly Western investors, reported Casinocitytimes.com.
"We purchased the notes from Dresdner and sold them to our investor base. Investors purchased the whole issue", said Andrey Dobrynin, director for international capital markets at MDM.
Dresdner, which retains the so-called settlement risk, will redeem the bonds only if Ritzio pays off the loan, Dobrynin said. The notes have a 12.75 percent coupon and will mature on December 23, 2005. According to MDM and Ritzio, American and British investors bought more than half the securities.
The company has about $50 million of debt maturing next year and plans to use the proceeds from the sale to pay off the debt. The rest of the money will be used to purchase slot machines.
