March 13 (Bloomberg) -- 32Red Plc, an online gaming company that makes most of its sales in the U.K. and Ireland, reported an annual loss and said it plans to raise money in a share sale after renegotiating a bank-lending accord.

The net loss for last year was 3.72 million pounds ($7.2 million), or 7 pence a share, the Gibraltar-based company said today in a statement. 32Red plans to raise 3 million pounds in the stock sale after reaching a revised agreement with Royal Bank of Scotland Group Plc to borrow up to 3.5 million pounds.

32Red, which sponsors English Premier League soccer team Aston Villa to gain publicity, said in December it had breached a debt covenant with the bank because of losses at Bet Direct, a sports bookmaker acquired in June. The company is moving the unit's operations to Gibraltar to save money by reducing taxes and said today the shift will be finished by June.

``The focus for the forthcoming year will be on relocating the Bet Direct operation to Gibraltar and moving that business into profitability,'' Chairman David Fish said in the statement.

The bookmaker's Web site was moved to Gibraltar in September, and trials of telephone betting have been carried out there, 32Red said. Still, Bet Direct's phone activities will remain in the U.K. for the Cheltenham and Aintree horse- racing meetings taking place this month and next.

No Dividend

Shares of 32Red closed unchanged at 30 pence in London. They slid 71 percent in 2006. The company, which gets about two-thirds of sales from Internet casino games, has a market value of 15.3 million pounds.

The 2006 loss compares with year-earlier net income of 1.30 million pounds, or 2.7 pence a share. Last year's sales rose 47 percent to 14.4 million pounds. 32Red, which declared a dividend of 3.08 pence a share for 2005, will not make a payout in respect of the latest year.

Annual sales from casino games climbed 5.5 percent to 9.42 million pounds, though the yield per player dropped 46 percent to 453 pounds as the number of new customers doubled. Poker sales jumped 77 percent to 1.49 million pounds, while player yields fell 30 percent to 73 pounds. Revenue from Bet Direct was 3.53 million pounds.

Bet Direct lost more money as favorites won matches in soccer's Champions League in September and a larger-than- average number of U.K. horse races.

Bank Warrant

32Red plans to offer up to 12 million new shares for 25 pence each in the sale. The stock equates to a 17.4 percent stake in the enlarged company. Managers including Chief Executive Officer Ed Ware, a former executive at bookmaker Ladbrokes, have agreed to buy stock. Numis Securities has underwritten the two- thirds to be offered to institutional investors.

Royal Bank of Scotland will receive a warrant to buy 583,333 shares of 32Red for 1 penny each rather than fees for the revised lending accord.

The company was largely unaffected by the passage of a U.S. law at the end of September that cut Internet gambling operators off from the country. When 32Red stopped taking bets from U.S. gamblers in October, it said casino and poker revenue from the country was only ``limited'' and that Bet Direct had never dealt with American customers.

To contact the reporter on this story: Dan Weeks in London at dweeks1@bloomberg.net

Last Updated: March 13, 2007 12:45 EDT