Codere creditors take control as restructuring concludes

The process to restructure Madrid-based gaming operator Codere has been completed, with the business now under control of a new entity owned by its creditors.


The debt-for-equity agreement struck in April this year sees the business transferred to Codere New Topco SA, a holding company in which the bondholders have a 95% stake. Its previous owners retain a 5% stake, though with an option to receive up to 15% of the proceeds of any future sale of the business.

The change in control will also see €225m invested in the business, of which €100m has already been provided. This is to keep the business afloat as it recovers from the impact of novel coronavirus (Covid-19) on operations across Spain, Italy and Latin America.

In addition, €350m of debt, related to its existing senior bonds, was converted into equity through the restructuring.

Negotiations with creditors began in March after the business reported a 57.1% year-on-year decline in revenue amid disruption caused by Covid-19, and followed years of financial difficulties.  Investors approved the restructuring in May this year.

The business had expected to be under new ownership by 5 November - and the process would have been scrapped if it was not completed by 30 November. However it announced last week that it would not close until today (19 November), when publishing its results for the three months to 30 September.

The third quarter results revealed a 63.1% year-on-year increase in revenue to €233.3m as land-based operations in Argentina and Panama resumed as pandemic-related restrictions were eased. The operator said it expects to return to 80% of 2019 turnover in its full-year results.

Codere’s online division, which contributed €19.1m to the Q3 total, is set to be split out from the main business and listed on the Nasdaq stock exchange through a combination with special purpose acquisition company DD3 Acquisition Corp.

Codere SA, the operator’s previous holding company, is to call a general shareholders’ meeting in December to approve a liquidation process, after which it will ask for trading in its shares to be halted as it is broken up.