Operator News

Spain – Creditor plan approved as Codere’s revenues slip 54 per cent

By Phil - 20 May 2021

With first quarter revenues down 54.3 per cent to €127.2m, Spanish operator Codere has confirmed its creditors have green-lit proposals to take control of the business.
Codere’s EBITDA came in at €3.5m, down a huge 92.7 per cent with an overall loss of €91.5m.

‘Restrictive measures adopted in many countries in response to the health crisis’ hampered Codere’s business throughout the quarter with new closures in Mexico, Argentina and Panama. Codere’s businesses in Italy, its biggest earning market, were closed for the entire quarter, with revenue coming in at €60.2m. Spain, the second biggest earner, fell 34.3 per cent to €26.6m.

Revenues in Mexico were drastically down, slumping by 63.5 per cent to €22.1m. A similar fall was felt in Panama where revenue fell by 60.1 per cent, whilst Argentina fell by 41.4 per cent.

Codere said: “The group’s business continues to be affected by the impact of the pandemic, which continues to be severe in many of the countries where the company operates. The decline in income could not be fully balanced by the decrease in operating expenses, despite the significant measures for efficiency and cost savings implemented during the pandemic.”

Shareholders were able to confirm the restructuring agreement reached with the group’s creditors, which implies an additional contribution of liquidity of €225m and the capitalization of up to €360m of debt.

The remaining debt matures until September 2026 and November 2027.

Codere said: “The entry of the new funds will be given through a bridge loan of €100m of which €30m were contributed after the restructuring announcement last April and €70m will be provided after obtaining the adhesion of 75 per cent of the bondholders, and up to an additional €125m granted through super senior bonds that will be provided at the end of the restructuring process, which is expected to take place at the beginning of the fourth quarter of the year.

“With this process Codere considers, based on current estimates that the viability of the company is ensured, thanks to the trust of its bondholders in the prospects of the group, in its management team and in the more than ten thousand employees that make up the organisation,” it added.

“It will be then, with the culmination of this restructuring process, when a new head of the group will be created, through which the creditors of the existing senior guaranteed bonds will have 95 per cent of the share capital and the current shareholders five per cent obtaining warrants that grant them the right to receive up to 15 per cent of a valuation of over €220m in a possible liquidity event within 10 years.”

“The company plans to request the liquidation of Codere SA, a process that would allow its current shareholders to have stakes in the capital of the new head of the group or, optionally, an economic compensation that would result from the sale of the proportional part of their actions.”