William Hill float scrapped as banks refinance Walker: Pounds 325m debt agreement saves jewel in leisure group's crown

THE pounds 500m flotation of William Hill has been scrapped following parent Brent Walker's unexpected success in refinancing pounds 325m of the betting chain's debts two months before the bankers' deadline for repaying or rearranging the loan.

Lloyds Bank and Standard Chartered have jointly arranged a new syndicate that will extend William Hill's repayment date from 1 March 1994 to 1999.

The deal dispenses with three options being considered by the troubled leisure company: the favoured one of flotation, trade sale or sale to a venture capital consortium.

Sir Keith Bright, who was appointed Brent Walker's chairman in February, said he was delighted there was no longer pressure for a fire sale of the betting chain, the jewel in the crown of the beleaguered leisure and property group.

Sir Keith said the banks had finally realised that the business plan presented in August, which he described as pretty bold, offered them a chance to profit from improving market conditions in the betting industry.

'The poor old banks have taken an awful lot of pain in the past, and they deserve a bit of gain in the future,' he said.

'Also, Brent Walker is now absolutely properly corporately governed. It is run by good businessmen.'

The refinancing comes in the week when George Walker, former founding chairman and chief executive, appeared at pre-trial hearings on charges of theft involving a total of pounds 16.5m.

Lending to the William Hill betting chain is ring-fenced from the rest of the group, and the collateral pledged to its bankers, including Credit Suisse, was recently independently valued at higher than the total loans. Despite this, several banks wanted the float to clear their loan books.

Brent Walker's only other substantial asset would be the 2,000- strong Pubmaster chain, recently hit by a pounds 210m write-down of its property values.

David Harrison, senior general manager, corporate banking division, at Lloyds said that the new bank syndicate was not yet complete, but the number of participating banks was already into double figures.

He thought the arrangements would be in place by February. 'We don't think we will have problems with it.'

Sir Keith said several of Brent Walker's original banks had wanted to get out, while others had been left no option. For instance, the banking arm of British and Commonwealth, the finance group that went into adminstration, had been forced to pull out, he said, as had an Australian bank because of poor conditions at home.