Isle of Capri sells UK casino to Rank Plc
Isle of Capri Casinos has sold a casino at the Ricoh Arena in Coventry, UK, to The Rank Group for £650,000, or an approximate current U.S. value of $940,000.
In conjunction with the transaction, the Isle of Capri also executed a buy-out of the company's obligations under the Coventry casino lease for £7.7 million (US$11.2 million), and releases Isle from its parent guarantee under the lease.
Donn Mitchell, senior vice president of UK operations for Isle of Capri, said, "We have taken a significant step forward in our plans to focus on U.S. operations by arranging for a discounted buy-out of the Coventry casino lease and sale of the Coventry casino operations to Rank. We are very pleased with the outcome of this transaction as the deal enables us to strategically exit the UK on good terms from all ongoing financial obligations, including our lease with the Ricoh arena. Additionally, the property will continue to operate under the management of one of the top UK gaming companies, so we do not expect the impact of a closure to be felt by employees or patrons. We built a magnificent facility in Coventry hoping to take advantage of changes in the UK gaming laws that did not occur, and have executed this deal in order to substantially mitigate the negative financial impact we expected to incur should we have continued to operate our facility there moving forward."
Rank said in press statement that the casino will be re-launched under Rank's G Casino brand after an investment of £1 million to reconfigure the site. It will become the Group's eighth G Casino within a portfolio of 33 UK clubs.
The announcement comes as Rank revealed a 3 percent rise in revenue at Grosvenor Casinos for the first 16 weeks of the financial year.
Phil Urban, managing director of Grosvenor Casinos said: "In recent years we have successfully broadened the appeal of our business through the development of the G Casino brand, offering customers a grown-up leisure experience based on entertainment, gaming, fun and hospitality. I am excited at the prospect of bringing G Casino to Coventry as part of the superb Ricoh Arena."
Grosvenor Casinos will take over management of the casino with immediate effect. The Isle of Capri casino was opened in 2007 as part of the £113 million Ricoh Arena.