Supplier News
Chile – Enjoy and Advent deal on hold
By Phil - 29 November 2016
Chilean casino operator Enjoy has temporarily suspended its agreement with Advent International.
The deal was initially agreed upon in September when, after an Extraordinary General Meeting of Shareholders, Enjoy approved a capital increase which would allow its new partner, Advent International, to enter the business and develop a joint venture. According to the terms of the agreement Advent International would pay at a price of US$80 per share for a total of 650.741,492 shares in order to raise a total of US$76.5m. This figure is equivalent to around 30 per cent of the company’s value.
However Enjoy has announced that the deal is on hold for the time being. The registration for the capital increase does though remain in force. In a letter to Chile’s securities and insurance regulator (SVS) General Manager of Enjoy, Gerard Cood said that negotiations with the fund “are suspended pending further clarification of the process of the granting licenses for casino operations in the communes where municipal casinos operate,(and) which are currently being reviewed by the Supreme Court. ” Enjoy currently has the licence to run the municipal casino in Coquimbo, Viña del Mar and Pucón.
The Chilean Gaming Control Board (SJC) postponed the hearing for the submission of tenders for the municipal casino licences at the end of October. According to a statement released by the SJC via its website the decision was made while the court considers a number of motions put forward by investors. Investors have filed a writ of amparo – a remedy for the protection of their constitutional rights. Operators have also pointed out a number of shortcomings as well as a lack of information when it comes to the tender process initiated by the SJC to the courts. They have also warned that the demands put on operators applying for the casino licences are excessive and would make the businesses unprofitable.
The seven new licences are available after President Michelle Bachelet signed into law new regulations, which extend the licenses of the seven municipal casinos in Chile. The new rules extend the licenses until December 2017 in the districts of Viña del Mar, Arica, Iquique, Puerto Varas, Coquimbo, Pucon and Puerto Natales, which all expired on December 31, 2015. Once these licences expire the statute provides that from that date onwards, those municipalities will continue to be a home to a casino for a total of three periods of 15 years each and the new casinos will come under the supervision of the SJC.
