Fitch downgrades Gala Group

Fitch Ratings said it revised Gala Coral Group Ltd.'s outlook to negative from stable and affirmed its long-term issuer default rating at B.

Fitch also said it downgraded the company's subsidiary Gala Group Finance plc's senior secured notes to BB- from BB and the recovery rating to RR2 from RR1.

Gala Electric Casinos plc's senior notes also were affirmed at CCC+ with a recovery rating of RR6.

The outlook revision of Gala Coral reflects the contraction of EBITDA in 2013, resulting from several one-off factors, industry-wide challenges and specific issues at its online and bingo operations, all of which demonstrate that management's strategic re-launch plan initiated in 2010 is far from complete, Fitch said.

While the latest weak financial performance raises questions about the group's de-leveraging ability over in 2014 to 2015, a number of strategic initiatives currently underway and improving cash flow generation provide some mitigating comfort, the agency said.

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