Codere Restructuring Plan Receives Shareholder Approval

A restructuring deal proposed by creditors at Codere that will see the business being brought under a new holding company was approved by shareholders at the Madrid-based gaming operator.

Restructuring Plan Gains Shareholder Approval

The proposed deal set provisions for Codere creditors to take full control of the company’s operating business after the restructuring plan received approval from the majority of bondholders at the casino company last month.

“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 organization.”

The restructuring put forward in April and already approved by the board of directors at Codere, sets up a new business entity in which Codere bondholders will have a 95% stake, while the remaining 5% will be left to current Codere shareholders. The new business will see €367 million of debt being capitalized into equity.

Codere shareholders will be granted a further compensation in the form of warrants of up to 15% of the new holding company, exercisable in case Codere market valuation for the next 10 years exceeds €220 million.

Due to temporary closure of some its gaming venues across core operational markets, Codere will also have to raise a further €225 million to ensure sustainability for its business. The amount will be raised by a bridge loan of €100 million and €125 million of super senior bonds, while debt payments with maturity in 2021 were agreed to be delayed to 2023 initially, and then to 2026.

Deal Still Requires Creditor Sign-Off

While a group of super senior bondholders and senior guaranteed bondholders already supported the restructuring deal, it still requires a formal sign-off from at least 75% of Codere creditors before the restructuring plan can be initiated.

Earlier this month, a filing to the National Securities Market Commission in Spain revealed another scandal brewing at the casino operator after Codere founding family Martinez Sampedro requested the regulator to enforce US investors at the company to outright purchase the family’s stake for a price of €900 million.

The filing stated that the requested price for the family’s 14% stake at Codere was seen as proper compensation for having their minority shareholder rights bypassed in 2018 when US investors did not table an offer to minority stakeholders when they reached 30% holding at the company and later on stripped them of their voting rights.