Codere investors back deal to hand control to creditors

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Under the deal, which has also been ratified by the operator’s board, all of Codere’s current business will be brought under a new holding company. The restructuring was agreed with the majority of bondholders last month.

This new entity will be 95% owned by its current bondholders. Current Codere shareholders will hold the remaining 5%, but will also receive warrants that may grant them up to 15% of the business if its valuation exceeds €220m in the next 10 years.

Through this process, €367m of Codere’s debt will be capitalised into equity.

In addition, Codere will raise a further €225m to keep itself afloat until its venues may reopen following novel coronavirus (Covid-19) lockdowns across key markets.

This comprises a €100m bridge loan – of which €30m has already been contributed – and €125m in super senior bonds.

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

The deal still requires final sign-off from at least 75% of bondholders before the restructuring can be implemented.

A group representing two thirds of super senior bondholders and half of senior guaranteed bondholders already backed the deal.

Codere started negotiations with lenders last month, at the same time as it reported a 57.2% drop in annual revenue.

Its date issues date back further, however, as currency fluctuations in its Latin American markets, particularly Argentina, contributed to the need for a refinancing deal that was agreed last year.

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