Wholly owned interactive social gaming subsidiaries designated as "unrestricted subsidiaries under its debt agreements."
A statement issued Wednesday by the Scientific Games land and online gambling supplier boosted its share price by 22.2 percent in a clear indication that investors like what they are seeing from the new management of Kevin Sheehan.
The announcement that created all this positivity detailed a management decision to designate its wholly owned interactive social gaming subsidiaries as "unrestricted subsidiaries under its debt agreements," as part of an overall strategy to maximise growth.
The subsidiaries affected include Dragonplay Ltd. and Phantom EFX, LLC, and the unfettering means that Scientific Games will be able to gain profit for the interactive division without using the company's earnings to meet its debt obligations.
"Our industry leading investment in innovation is paying off. Following our company's third consecutive quarter of revenue growth, we see this as a perfect time to accelerate momentum and explore additional opportunities to deliver greater value from this strong and rapidly growing segment of our business," said Sheehan.
"The company will consider a range of options to solidify its leadership in this fast growing segment, including potential new joint ventures, acquisitions, IPO (initial public offering) and other growth options."
SG's social gaming business has generated sequential double-digit growth in each of the most recent three quarters and a 68-percent increase in revenue year-over-year for the most recent quarter (second quarter ended June 30, 2016).
Following the unrestricted designation, the social gaming entities will remain wholly owned by Scientific Games and continue under the leadership of Barry Cottle, CEO – Interactive and Jordan Levin, President – Interactive.
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