German Gaming Company Mybet In Grips of Insolvency with €4 Million Debts
German gaming firm, Mybet, is planning to plead insolvency, after talks with a strategic investor interested in acquisition fell through.
The company, which is one of the largest gaming services provider in Germany, had plans to sell its profitable customer-facing online gambling operations wing to an undisclosed investor in an effort to focus on their growing B2B division. However, after failing to come to a mutually-beneficial agreement, the Berlin bigwig sent letters to its Board of Directors disclosing its intention to claim insolvency in the court of law.
The failed acquisition, coupled with Mybet’s rejection for provisional suspension or stay of enforcement filed at the Main II Tax Office by their sister division Personal Exchange International, has left behind a staggering debt and tax arrears amounting upwards of €4 million. The company has claimed “imminent illiquidity”, meaning it foresees no possibility of paying-off the debt and will in all likelihood, stop operations soon.
Mybet, which had experienced a phenomenal growth in market share and revenues in the period encompassing 2013-2014, saw a slowdown in its earnings after the slew of internal restructuring it engaged in, which included the sale of its Italian counterpart – Mybet Italia – in late 2014. Following this was its poor Sportsbook performance, where the company saw a decline in revenue by 11.6%, with its 2016 quarterly revenues falling to €10.7 million from the 2015 Q3’s €12.1 million. For 2017, Mybet estimated a further slashing of revenues by €16 million.
Things looked hopeful for the German conglomerate in early 2018 when the powerful financial investor professed interest in the company’s online gaming division. A non-exclusive term sheet was signed by Mybet with the company which included terms for a 100% takeover of Mybet’s business, with the valuation leading into the single-digit million range. While share values increased temporarily, the declaration of insolvency has led to a dismal drop in the company’s value. As of today, Mybet’s shares stand at €0.072, a further €0.18 from yesterday.
In its last financial report released in November 2017, the company revealed to the investors and the public a 28.2% drop in its 9-month earnings to a meagre €24.9 million. Mybet’s sports betting division also fell by 17% to €17.8 million, while the casino revenue dwindled by half to a sorry figure of €5.4 million. Novomatic Group’s exit from the German market has further hampered the company’s ability to successfully serve the live casino market, leading to further operational & financial challenges.