Operator Esports Entertainment Group (EEG) is considering a sale of its remaining igaming business and also confirmed the exit of CEO Grant Johnson.
Esports Entertainment Group has experienced a turbulent time in recent years, with brand closures, a debt default and large operating losses. In May, within the company quarterly financial reportEEG said there was “significant doubt” about its ability to continue operations for at least a year.
Then in October, the group announced that it was effectively at the mercy of an unnamed creditor after the company defaulted on its debts.
Earlier this week, the company announced that it had avoided delisting but had to dramatically increase its share price by February to remain listed on the Nasdaq exchange.
Given these financial problems, the iGaming business is now being restructured, with the sale of its online casino business in Spain expected to be completed by December 12th. The proceeds from the sale will be used primarily to repay the principal of a convertible senior note.
Meanwhile, Esports Entertainment Group has closed its Argyll iGaming operations – which operate RedZone and SportNation – in the UK and Ireland with effect from yesterday (December 7), citing high operating costs and an inability to make profits. EEG had already announced that it would close its RedZone and Sport Nation brands in the UK.
Now EEG has announced that it will explore further strategic options for the iGaming business, including exploring a possible sale of iGaming assets due to increasing regulatory burdens and increasing competition.
Looking for a new CEO
This process will be overseen by the new CEO of Esports Entertainment Group. The operator’s board has identified a number of candidates to replace the outgoing Johnson and an individual assessment is currently taking place
Earlier this week it was reported that the EEG board had asked Johnson to resign, with his resignation now confirmed by the operator.
Esports Entertainment Group said its board has identified a preferred candidate for the position of acting CEO and will formally announce the appointment in the coming days, subject to formal approval by the Nominating and Corporate Governance Committee.
In this context, Esports Entertainment Group announced Jan Jones Blackhurst as its new CEO.
“Grant recognized the value of esports and online gaming and founded EEG on that basis,” Blackhurst said. “On behalf of the board, we wish him all the best.
“The company looks forward to attracting new leadership to work with the board to realize the full potential of our acquired esports companies.”
This new CEO will be tasked with determining the value of the group’s iGaming assets and exploring possible sales opportunities.
Possible Esports Entertainment Group merger
Turning to its broader operations, Esports Entertainment Group announced that it also recently received a non-binding letter of intent from a third party in connection with a possible merger. EEG did not disclose the identity of the interested party, but said that if the deal closes, the combined company would focus on increasing esports revenue.
EEG is currently examining the planned merger.
Esports Entertainment Group also announced that it is in discussions with its debtor to restructure its payment obligations, including eliminating the derivative liabilities on its consolidated balance sheet and addressing its default status under the debt.
EEG said it remains optimistic that an agreement can be reached in the near future to the benefit of both parties.