Under a proposed Company Voluntary Arrangement (CVA), a customer trust distribute a 50% equity stake in BetIndex between existing customers who had an active Football Index portfolio at the time when the company entered administration.
Details of this were revealed ahead of a High Court hearing today, that will determine how funds in a £4.5m player protection account may be distributed.
Adminsitrators said this was possible as “the underlying business model is attractive to customers and financially sustainable”.
Shareholders of Index Labs Ltd – owners of BetIndex – would have to vote to relinquish control of the company if a CVA could be agreed with customers.
An investment trust would hold the remaining 50% equity in BetIndex, with a view to attracting external investors. These investors could potentially create a means of exit for any players holding a stake in the customer trust, as the customers may be able to sell their stakes to investors.
Any customer would retain the right to become a corporate member, which would grant them the right to vote to elect members of the board of directors.
In terms of the actual platform, a similar format to the last original title has been proposed for the sake of continuity, but with certain differences that the operator said will help keep it financially viable.
Rather than a remote betting licence, the operator may obtain a pool betting licence, which was described as the “most sensible” way to continue.
An archived share pool containing £7m would be constructed in order to continue dividend payments, but dividends for these will be suspended for six months. All shares in the archive would expire after three years.
The administrators said “the directors consider that there is a real prospect” of the operator being relicensed.
When asked about the possibility of granting Football Index a new licence, a Gambling Commission spokesman said: “We would not talk about any potential licence applications or submitted applications.
“We would thoroughly examine the business model of any licence application before granting a licence.”
The operator estimates that under this relaunch, players would receive roughly 20.5p for every pound owed.
The original closing statement delivered by BetIndex after the company went into administration mentioned plans of a potential restructuring in the future. A statement at the time said: “We are pursuing a restructuring arrangement to be agreed with our stakeholders including, most importantly, our community.
“We are preparing this through an administration with insolvency practitioners Begbies Traynor, to seek the best outcome for customers with the goal of continuing the platform in a restructured form.”