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South America – Codere secures credit as it looks to expand in Mexico and Uruguay

By - 2 January 2020

Codere has managed to secure a new line of credit as confirmed in its interim report submitted to the National Securities Market Commission (CNMV).

The credit amounts to US$30m and $200m Mexican pesos and will be used to improve the liquidity of the group in both Uruguay and Mexico, respectively. The loan adds to its already existing €90m revolving credit facility, of which to date it has used €40m of funds. The firm has also refinanced a €769m bond, set to mature in 2021.

In November Codere released its nine-month report reporting an increase in net loss as it continues to suffer from the economic crisis in Argentina. Other challenges facing the company are new taxes in Argentina, and Italy. However it reported solid gains in its online operations in, Spain, Italy and Uruguay. Its online sector is evolving in line with expectations, “delivering revenue and adjusted EBITDA growth with prudent levels of marketing investments,” the company said. Codere also highlighted the significance of policy changes in Mexico.

President Andres Manuel Lopez Obrador has publicly come out against the granting of new casino licenses during his 6 year term as president in Mexico (until 2024). The company said however that while the decision may affect new licenses, it does not prevent it from using already existing ones (35 + unused licenses) “or continue acquiring halls from small and medium sized operators.”

In August Codere signed an agreement with Hard Rock to grant it some land in Mexico and build a tourist complex valued at close to US$1bn. Codere will receive 40 per cent of the project in return. According to sources close to the talks, Codere has agreed to transfer land in Mexico City for the US group to build their second guitar-shaped hotel.

In Uruguay the company is looking for a partner. As acknowledged at the end of September, the company has had a number of conversations with potential partners to establish a possible joint venture or the sale of a non-controlling interest in the market. In Uruguay, the group has operations through 2,252 gaming terminals, six gaming rooms, 26 betting venues, the Maroñas National Racecourse, Las Piedras Racecourse, as well as the Sofitel Montevideo Casino Carrasco & Spa.

Codere is a leading international private gaming operator with over 57,130 slot machines, 29,537 bingo seats and 7,659 sports betting terminals in Latin America, Spain and Italy, across various gaming venues, including 148 gaming halls, 1,119 arcades, close to 10,000 bars, 602 sports betting shops and 4 horse racetracks.

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