Global gaming firm Light & Wonder has stated that it has reduced its debt by more than 50% via debt refinancing. The money came from the sale of its lottery business. With this move, the company’s debt has been reduced from $8.8 billion to $4 billion.
The Company Aims to Reduce the Debt Even More
In total, Light & Wonder managed to reduce its debt ratio from 6.2x to less than 3.9x. The refinancing deal includes redeeming $3 billion in unsecured and secured notes and retiring a $4 billion term loan. At the same time, it secures a $2.2 billion term loan facility and enters a revolving credit facility of $750 million.
Thanks to this option, the company is reducing annual interest by $225 million, but Light & Wonder does not plan on stopping there. Its next priority is to further reduce the debt leverage ratio and bring it anywhere between 2.5x and 3.5x.
The CEO of Light & Wonder, Barry Cottle, stated that thanks to the lottery business sale, the company will be able to progress rapidly and execute its strategy to transform the business.
He also added that he sees an opportunity to create value for the shareholders by developing great games that will entertain players at any time and place. Cottle concluded by saying that the steps that the company takes will allow it to create value and thus, Light & Wonder will be able to execute its vision of becoming the world’s leading cross-platform gaming company.
Apart from the plan to reduce the debt ratio, Light & Wonder stated that it will make investments in opportunities that are seen as a better long-term alternative than debt reduction or buy-backs. The priority concerning share buy-backs is to bring them to $750 million.
Light & Wonder Rebranded in March 2022
Light & Wonder is formerly known as Scientific Games. The company announced that it will be changing its name as part of its transformation into an enterprise that is more digitally driven. The whole rebranding process is set to be finalized during the June quarter and Light & Wonder’s new website was launched on March 3, 2022.
Speaking on the process of rebranding, Cottle stated that Light & Wonder is a name that captures the excitement, imagination, a bit of magic, and inspiration. In other words, these are feelings that the company wants to capture in its everyday work.
In the 2021 fiscal year, Light & Wonder, then Scientific Games, reported a 27% increase in revenue as it reached $2.15 billion. Adjusted EBITDA was $793 million, up 112%.
In the fourth quarter of 2021, iGaming revenue increased to $54 million and gaming revenue went up by 30% and reached $372 million. The consolidated revenue was $580 million and net revenue was $62 million. That represented a massive YoY improvement as Q4 of 2020 resulted in a $143 million net loss.