Mexico – Codere purchases 100 per cent of its Mexican subsidiary CalienteBy Phil - 4 April 2017
Codere S.A. has informed the Spanish National Securities Market Commission (CNMV) that it has acquired Grupo Caliente, mainly through its wholly-owned subsidiary Codere México S.A.
According to the communication with the CNMV Codere, via its subsidiary Codere México S.A, has acquired 32.7 per cent of Caliente that it did not previously control for US$26m.
With this agreement both groups put an end to all company agreements and contracts between the parties, although Caliente will continue to provide Codere with certain services related to the sports betting business. The transaction has been made for US$26m of which US$22m corresponds to a cash payment and the remaining US$4m will be carried out in the form of the cancellation of an existing account between the two groups.
Codere and Caliente have had a long standing agreement in Mexico and Codere has been providing gaming management services and hall development services since 1997 for Caliente. In 2010 Codere and Caliente signed an agreement which consisted of the restructuring of approximately US$121m of debt of Caliente through the acquisition by Codere of a share of its gaming operations.
In March it was revealed that Codere had faced a number of obstacles in Mexico after it released its financial results for the quarter and full year ending December. The company reported that it had faced setbacks in Mexico due to the weakening of the Mexican peso following the US presidential election. According to the report the accumulated turnover in 2016 in Mexico reached €330m, 7 per cent less than in 2015 (€355m) due to the depreciation of the peso against the euro (17 per cent). However in local currency, revenues grew by nine per cent.
Earlier this week via a press release overall the company reported it had grown steadily over the last 42 quarters despite increases in taxation in key markets such as Spain, Argentina and Colombia and the devaluation of a number of Latin American currencies against the euro Argentina (59 per cent), Colombia (10 per cent) and México (17 per cent). According to the latest release in Mexico the company had obtained “very good results as a result of the continuity and rigor in the implementation of its operational plans.”