With long-term debt more than the total amount of assets, the IPO of Gateway Casinos (GTWY) does not seem exciting.
The company reported a 43% increase in revenues in the nine months ended September 30, 2018. However, revenues are not likely to grow at the same pace in the future as the casino market in Canada is not growing at such a large pace.
- Gateway Casinos runs gaming and entertainment businesses in Canada.
- The assessment of the debt shows that Gateway Casinos is paying an interest rate of 8.25%, which some financial analysts may perceive as quite elevated.
- The company’s long-term debt equals $1.234 billion, which is more than the total amount of assets.
- The company expects to be a controlled entity.
- It seems very relevant noting that the company will not receive money from the IPO. Two large shareholders will sell shares in the IPO.