Bragg Gaming has entered into a new financing agreement with a major commercial bank in North America to support its ongoing growth.
The Bank of Montreal (BMO) has made certain credit facilities available to the company in a maximum aggregate amount of up to US$6.0 million to support its ongoing working capital and general corporate requirements.
In connection with the closing of the BMO facilities, Bragg has successfully repaid in full the outstanding promissory note with entities controlled by Bragg managing director Doug Fallon.
“We are very pleased to establish this new relationship with the Bank of Montreal, a recognized leader in financial services,” said Bragg chief financial officer Robbie Bressler. “This new credit facility strengthens our balance sheet and provides us with a flexible capital structure to execute our strategic plan.
“The ability to secure financing from a major North American bank underscores the confidence in our business and our long-term growth prospects. We look forward to a long and successful partnership with BMO.”
The company believes that based on the terms of the BMO facilities, its borrowing costs on an annualized basis will be less than half of its prior note debt.
Bragg CEO Matevž Mazij commented: “Securing this BMO facility represents a critical milestone in our strategic plan to strengthen Bragg’s financial foundation and accelerate value creation for our shareholders. With our cybersecurity incident contained and our borrowing costs cut by more than half, we are laser-focused on executing our strategic shift toward higher-quality earnings.
“The company is prioritizing margin and cash generation over lower-margin revenue, and synergies realized post-quarter end to become a leaner operation. We’ve already realized €2 million in annualized synergies and are on track to achieve our 20 per cent adjusted EBITDA margin target for the second half of 2025.”
Mazij said that Bragg understands the importance of delivering results for shareholders, and its board and management team are fully aligned and committed to executing the strategic initiatives that will drive value.
“With improved financial flexibility, a strengthened operational foundation, and clear milestones ahead, we believe we have the right strategy and team in place to unlock Bragg’s full potential,” he continued. “We remain committed to maximizing shareholder value as we build sustainable, profitable growth and ensure our strong operational performance translates into appropriate market valuation.”
Bragg also provided an update on its previously announced cybersecurity incident initially detected on 16 August, and considers that the incident is now resolved.
Immediately following detection, Bragg took appropriate steps to mitigate any potential impact of the breach with the assistance of independent cybersecurity experts.
“There continues to be no indication that any personal information was affected and the breach has had no impact on the ability of the company to continue its operations,” said the company. “Bragg has also provided assurances to its customers regarding the security of its game titles.
“The company has experienced no negative impact on its revenue or profitability and does not expect that the cost of responding to the incident will have a material financial impact on the company.”
Shares in Bragg Gaming Group Inc (TSE:BRAG) closed 4.59 per cent higher at CA$3.87 per share in Toronto Friday.