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MGPE puts £45m into Coral

Morgan Grenfell Private Equity’s cash injection has helped the bookmaking business cover interest payments and costs incurred by the acquisition of Eurobet.

Morgan Grenfell Private Equity has put £45m into one of its portfolio companies, Coral, the internet bookmaking business.

The Financial Times reports that the investment was used by the bookmaking business to cover a £30.4m marketing cost for Eurobet, the online business it bought last year, and interest payments on its £260m debt.

It is believed that Coral’s traditional betting business made an operating profit of £42m in 2000 and Eurobet broke even before the marketing expenditure. But building Eurobet’s brand and interest payments resulted in a £52.2m pre-tax loss in 2000.

Coral was due to go to IPO last year but pulled out because market conditions were not right. A listing could have valued the company at up to £1bn. Morgan Grenfell is understood to be looking to sell the business.