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February 5, 2008 |
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RANK GROUP: Ruach Ministries Buys Mecca Bingo Club for GBP9 Mln Ruach Ministries, a gospel church, has acquired Rank Group plc's Mecca bingo club on Kilburn High Road in London for GBP9 million, the Daily Telegraph reports. The Daily Telegraph relates the club, which Rank shut down last autumn, will be converted into a Christian center. The building, the Daily Telegraph adds, is Grade II listed. Ruach, however, declined to comment on the transaction, Alistair Osborne writes for the paper. The paper reveals the smoking ban, a cut in the number of permitted GBP500 jackpot machines and double taxation have contributed to bingo club closures in the U.K. Double-Tax Regime As previously reported in the TCR-Europe on January 28, 2008, Rank, along with other bingo club operators in the U.K., has submitted a letter to the Treasury, saying the double-tax regime for bingo can be detrimental for the government. The letter is part of an attempt to address the "unfair" tax treatment of bingo, which bingo club operators claim, is "the only mainstream gambling product to be subject to double taxation in the form of gross profits tax and VAT." According to the letter, which was signed by eight bingo senior executives, including Rank chief Ian Burke and Gala head Neil Goulden, the existing double-tax regime is putting 108 bingo clubs at risk of closing down. The letter stated that the Treasury may lose about GBP700,000 per annum in revenue for each bingo club closure if the government continues to impose VAT. "Based on current projections, the net cost of removing VAT at this point is likely to be revenue positive to the government when compared with the cost of clubs closing," the bingo executives declared in the letter. Meanwhile, Rank disclosed closing just 10% its 102 clubs, which pays around GBP8 million a year in VAT, would cost the Treasury more than GBP10 million. Headquartered in London, United Kingdom, Rank Group PLC -- http://www.rank.com/ -- is an international leisure and entertainment company. The Group provides services to the film industry, including film processing, video duplication and cinema exhibition. The Group's leisure and entertainment activities entail gambling services, encompassing Mecca Bingo Clubs and Grosvenor Casinos, and owned and franchises Hard Rock cafes. * * * As reported in the TCR-Europe on Nov. 14, 2007, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on U.K. gaming group The Rank Group PLC to 'B+' from 'BB-'. S&P said the outlook is negative. At the same time, the debt ratings on Rank's three public bond issues were lowered to 'B' from 'BB-', one notch lower than the corporate credit rating to reflect structural subordination, and the 'B' short-term corporate credit rating was withdrawn at the company's request. In October 2007, Moody's Investors Service downgraded to B1 (from Ba3) the corporate family rating of Rank Group Plc. Moody's concurrently downgraded ratings of the US$100 million guaranteed notes due 2008 and US$14.3 million guaranteed notes due 2018 at Rank Group Finance Plc to B3/LGD5/85% from B2/LGD5/84%. Ratings have been placed on review for possible further downgrade. In April 2007, Standard & Poor's Ratings Services revised its outlook on the company The Rank Group PLC to negative from stable. At the same time, the 'BB-' long-term and 'B' short- term corporate credit ratings were affirmed. |
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