German online betting operator Mybet has sold its stake in the Pferdewetten.de horseracing business after finding itself in a cash crunch.
This week, Mybet announced that it had sold its majority stake in Pferdewetten.de AG to a collection of individual investors. Mybet declined to specify how much it had raised, but the over 1.8m shares sold would be worth about €10m given their current price.
Mybet says it will deposit a portion of the proceeds with a trustee, as Mybet had used its Pferdewetten stake as collateral for the €5m convertible bond Mybet issued in November. The share sale requires Mybet to make a mandatory tender offer to creditors within 30 days.
Mybet CEO Zeno Osskó said the decision to sell was one “we would have liked to avoid” but the company has yet to receive clearance from Maltese regulators regarding last October’s sale of Mybet’s B2B payments subsidiary C4U-Malta Ltd.
The company had expected to receive the sale price of €3m from the purchaser – described at the time as “a company group which is primarily active in the financial services sector” – by the end of last year, but the Malta Financial Services Authority is dragging its heels for as yet unknown reasons.
Mybet says it can’t think of a reason why the C4U sale might not go through but, with the Malta money in limbo, Osskó said the Pferdewetten sale was the “most expedient of the alternatives available to us.”
Mybet’s recently released Q1 results showed its cash and equivalents falling nearly one-third to €4.6m at the end of March. Overall revenue was down 11% to €14.9m and Mybet recorded a net loss of €802k, an improvement over the €878k loss in the same period last year.
Sadly, Pferdewetten was one of Mybet’s few bright spots in Q1. Horse betting revenue was up 15.4% to €2.3m and retail sports betting improved 13.6% to €5.1m. But online sports betting was down nearly 39% to €2.2m and the casino & poker segment fell 21% to €4.3m.
The poor online performance was blamed on the company’s aging platform, the replacement for which remains in the starting gate. Osskó said the company would have loved to have had its new site up and running in time for Euro 2016 but was now aiming for a mid-July or early August launch, in time for the new European football season.