Affinity Interactive weighs asset sales and restructuring amid soaring debt crisis
Affinity Interactive, a U.S.-based entertainment company focusing on casinos, online games, dining, and hotels, is exploring restructuring options and potential asset sales to manage its growing debt load. The company's debt-to-EBITDA ratio has increased significantly, leading to credit rating downgrades and low trading prices for its senior secured notes.
Affinity Interactive has hired Akin Gump Strauss Hauer & Feld LLP for potential restructuring help and is working with Moelis & Co. to manage its debt. The company's debt-to-EBITDA ratio has risen from 7.8 times in 2023 to about 11.7 times by late 2024. Moody's and S&P Global Ratings have downgraded Affinity Interactive's credit rating due to rising debt and lower earnings. To raise cash, Affinity Interactive sold Rail City Casino in Sparks, Nevada.
Potential buyers for Affinity Interactive's assets could come from various strategic sectors. These include casino operators, franchise and restaurant betreibers, real estate investment trusts (REITs), hotels and resorts, online gaming providers, tech companies, private equity funds, infrastructure investors, sport and event management companies, and even public institutions. Motives for buyers could include market expansion, efficiency gains, asset rotation, or technological diversification.
Affinity Interactive, owned by Z Capital Group's private equity arm, is considering selling assets such as real estate and digital gaming properties like Daily Racing Form to raise funds. With limited room for refinancing due to low trading prices for its debt, the company is exploring restructuring options to manage its growing debt load.
