Bragg Gaming Group, a global B2B iGaming content and technology provider, entered into a new financing agreement with the Bank of Montreal (BMO), a North American financial institution, pursuant to which BMO has made available to the company certain credit facilities in a maximum aggregate amount of up to $6 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 Doug Fallon. The new BMO facilities replace the prior note indebtedness.
“We are very pleased to establish this new relationship with the Bank of Montreal, a recognized leader in financial services,” Robbie Bressler, CFO of Bragg Gaming Group, said. “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 BMO facilities are secured by, amongst other things, a first-ranking security interest over all of the assets of the company and certain of its key operating subsidiaries, and are uncommitted and are repayable upon the earlier of (i) demand by BMO, (ii) the occurrence of certain insolvency events and (iii) on the one-year anniversary of the closing date, unless a one-year extension is granted at BMO’s discretion.
The agreement includes customary legal and financial covenants, including a requirement for the company to maintain a total funded debt to EBITDA ratio not exceeding 2.50:1.00, and a fixed charge coverage ratio of not less than 1.25:1.00. These financial covenants are to be tested on a consolidated basis at the end of each fiscal quarter.
The company currently expects to draw on the BMO Facilities in Canadian dollars, which would result in estimated borrowing costs of 6.9% – 7.9% for Prime-based loans or 5.9% – 6.9% for CORRA-based loans, depending on the period of the draw and the company’s leverage ratio. Standby fees on the unused portion of the revolving facility will range from 0.75% to 1.75% per annum, depending on leverage.
Management believes that based on the terms of the BMO facilities, the company’s borrowing costs on an annualized basis will be less than half of its prior note debt.
“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,” Matevž Mazij, CEO of Bragg Gaming Group, said. “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 EUR 2 million in annualized synergies and are on track to achieve our 20% Adjusted EBITDA margin target for the second half of 2025.”
Mazij continued, “Our recent leadership additions in AI and innovation, combined with our expanding partnerships with operators like Fanatics and Hard Rock Digital, position us to pursue highly accretive growth opportunities methodically. The Company remains focused on growing the business in a sustainable and margin-accretive manner, with strong momentum in the proprietary content and technology pipeline positioning Bragg for long-term profitable growth.”
Mazij concluded, “We understand the importance of delivering results for our shareholders, and our 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. We remain committed to maximizing shareholder value as we build sustainable, profitable growth and ensure our strong operational performance translates into appropriate market valuation.”
