Entain PLC (LSE:ENT), the owner of Ladbrokes and Coral, could be fined up to £300mln as part of an ongoing case looking into the group’s former Turkish subsidiary, Citigroup Inc (NYSE:C) believes.
The FTSE 100 company has conceded any fine would be “substantial” without specifying an amount, but Citi says that based on precedent the fine will consider the gross profit of the Turkish business.
“The business, which operated between 2011 and 2017, saw 2016 revenues reach €100mln and clean EBITDA at €35mln," the US bank said:
“This provides much-needed clarity over a material ongoing risk to the business, but the scope of the financial penalty may be significant.”
Citi estimates the fine being between £200mln and £300mln.
This could eliminate the group’s positive cash generation for the 2024 financial year, the lender added.
Analysts at Morgan Stanley (NYSE:MS) believe the cash flow from Entain’s Turkish business during the six years amounted to £230mln.