Dutch gaming firm JVH in debt restructuring talks

By Elena Moya and Tessa Walsh

LONDON, July 8 (Reuters) - Troubled Dutch gaming firm JVH Gaming BV is negotiating a restructuring of up to 295 million euros ($461.6 million) of buyout debt after a smoking ban and new tax regime hit the company's profits, sources familiar with the situation said.

The arcade and slot-machine operator has appointed restructuring advisors Houlihan Lokey and law firm Allen & Overy, while the creditor committee, led by the Bank of Ireland (BKIR.I), is advised by KPMG [KPMG.UL], one of the sources told Reuters.

Options for JVH -- owned by private equity consortium Waterland, which includes Hutton Collins and the company's management -- include a debt-for-equity swap, the source said.

This could see mezzanine lenders' investment wiped out, banking sources said.

Waterland's purchase in May 2006 from ABN Amro and NPM Capital was backed by a 172.5 billion euro loan and 42.5 million euro mezzanine tranche that was arranged by Bank of Ireland and CIBC World Markets, according to RLPC data.

JVH returned to the market in June 2007 for a further 80 million euro add-on to its original buyout financing.

The company is challenged by a new tax regime for slot-machine operators that will translate into higher taxes, and a smoking ban that drives customers away from gaming locations, one of the sources said.

Founded in 1958, JVH operates 33 arcades across the Netherlands and is the leading operator of single-site slot machines, as well as managing arcades and designing and manufacturing gaming machines. (Editing by Will Waterman)