888 Spreads its Wink Payments

888 are experiencing problems meeting agreed payments for its Wink Bingo network due to a very strong performance on the part of the latter.

A payment of £48.7m needs to be settled by 888 in May, but 888 will be unable to meet it and have decided to spread the payment by making an immediate payment of £9.26m to Wink owner Daub Limited.

Further payments will be payable by 21st May 2012 in several installments at a hope of clearing the debt so it will not affect the proposed merger with Ladbrokes.

888 will pay interest on all delayed payments made later than the original earn-out scheduled date for May 2011.

The situation can be risky for 888 as they might end up paying more for Wink than the total £59.7m consideration capping. This is due to the enhanced profitability of Wink and has caused an ironic situation where the success of Wink is causing financial problems for 888.

Wink was purchased by 888 at the end of 2009 and has performed remarkably well. Wink was the second bingo purchase 888 committed to. They have also bought GlobalCom bingo platform and have incorporated it into their B2B arm Dragonfish from Daub Limited for $43m in March 2007.