Media Corporation says that its online gaming business Purple Lounge is trading behind expectations and the group will make a higher than forecast loss.
Management believes that the negative trade press relating to litigation by CD Casino.com. The www.purplelounge.com site has been temporarily suspended. Media Corp has lent more than £900,000 to Purple Lounge.
Media Corp had been planning acquisitions for its online gaming division. The shares were suspended at 1.02p each on 16 April, which values Media Corp as £3.65m. This was when the potential purchase of Poker Channel owner Gaming Media Group was announced.
However, the group cash position has deteriorated. There was £400,000 in the bank at the end of March 2012 with £250,000 received for disposals a few days later. At the end of September 2011 there was £2.2m in the bank.
Media Corp is considering its options for Purple Lounge and the decision may depend on whether the acquisition goes ahead.
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