Polish subsidiary of Olympic Entertainment Group files for bankruptcy
Eastern European casino operator Olympic Entertainment Group has announced that its Polish subsidiary has filed for bankruptcy protections following a late-September decision from the Finance Ministry not to extend its local license.
“Olympic Entertainment Group’s Polish subsidiary, Casino Polonia-Wroclaw that operated the flagship casino of Olympic Entertainment Group in Warsaw until September of 2016, has submitted to the court its bankruptcy petition,” read a short statement from Madis Jaager, Chief Executive Officer for Olympic Entertainment Group.
The firm had earlier revealed that its Casino Polonia-Wroclaw subordinate had operated the Olympic Casino Sunrise in the nation’s largest city since 2007 but that it was freezing operations from September 23 as it waited for its license application to be approved.
Also the company behind almost 160 casinos, betting shops and gaming centers in Estonia, Latvia, Lithuania, Slovakia, Belarus, Italy and Malta, Olympic Entertainment Group explained that its decision to freeze operations in Warsaw could result in impairment costs of up to $10.4 million alongside additional charges of around $1 million while as many as 39 people were at risk of losing their jobs.
Officials in Poland subsequently turned down Olympic Entertainment Group’s application for a local license on September 30 after explaining that the firm had missed a deadline for filing the appropriate paperwork.
As part of its consolidated unaudited financial results for the third quarter released in late-October, Olympic Entertainment Group reported a 9.4% decline year-on-year in revenues from Poland to approximately $4.4 million while the figure since the start of 2016 had decreased by 25.2% to about $14.1 million. As if this wasn’t bad enough, the firm declared that its nine-month earnings before interest, tax, depreciation and amortization in the eastern European nation had fallen by 124.8% to stand at a deficit of $626,000 with its operating loss subsequently growing by 577.7% to hit almost $9.2 million.
“Gaming revenues decreased 25.3% year-on-year [to amount] to $13.8 million,” read a statement from Olympic Entertainment Group. “Operating loss was caused by the impairment of goodwill and assets due to freezing active operations.”