Codere: creditors to take over operating business

The Spanish gaming group Codere will give creditors control of its operating business as part of a restructuring deal.

Spain.- A new restructuring deal will see the Spanish gaming group Codere hand control of its operating business to creditors.

All operating business will pass to a new holding company in which bondholders will own 95 per cent. Codere’s existing shareholders will own the remaining 5 per cent stake and will also gain warrants granting the right to receive up to 15 per cent of any future sale.

The agreement needs the support of at least 75 per cent of bondholders to progress, but it’s already been backed by a group comprising two thirds of super senior bondholders and half of senior guaranteed bondholders.

Codere has said the deal is essential for its business to remain sustainable until it may reopen all of its retail venues following the end of Covid-19 restrictions.

The agreement will inject €225M (£195m) into the company, with €30m immediately and €70m by the end of May. It will also see €350m worth of debt converted into equity, with the due date put back to September 2026 and November 2027.

Codere suffered a 57.2 per cent drop in revenue last month as a result of continuing Covid-19-related closures. Last year, it agreed a €250m financing agreement with an initial interest rate of 12.75 per cent. It was granted a debt extension in January.

Codere said in a statement: “With the implementation of this restructuring, which will foreseeably be concluded at the beginning of the fourth quarter of the year, Codere hopes to ensure the future of the company – thanks to the trust of its bondholders in the group’s perspectives, in its management team and in the more than ten thousand employees that make up the organisation.” 

Codere’s shares fell by 12 per cent to €1.08 on Friday after the announcement of the agreement.