The April debt-for-equity agreement at Codere that sees the business transfer to Codere New Topco SA has been completed. A holding company in which bondholders hold a 95% share, Codere New Topco SA is now the new owner. Although the previous owners retained a 5% interest, they can receive up to 15% from any potential sale of the company in the future.
Codere to Get Needed Funding
The restructuring plan will see $253.57 million invested into the business, $112.7 million of which has already been given. This is done to maintain the business’s viability as it recovers the effects of COVID-19 on its operations in Spain and Latin America.
Through the restructuring, $394.48 million in debt related to senior bonds was also converted into equity.
After the business suffered a 57.1% drop in revenue over the previous year due to COVID-19 disruption, negotiations began with creditors in March. These developments followed years of financial problems. The restructuring was approved by investors in May of this year.
The business was to become new owners by November 5. However, the process could have been halted if it wasn’t completed by November 30. Last week, however, it stated that it would not close until November 19, when it published its results covering the three months from September 30.
As pandemic restrictions were eased, land-based operations in Argentina and Panama resumed. The third-quarter results showed an increase of 63.1% in revenue to $262.86 million. According to the operator, it anticipates returning to 80% of its 2019 turnover in its full-year results.
Codere Online-DD3 Tie-Up Moves Forward
Codere’s online segment, which contributed $21.52 million in the Q3 total, is to be separated from the main company and listed on Nasdaq through a combination deal with special purpose acquisition company DD3 Acquisition Corp.
DD3 Acquisition Corp. II is a publicly-traded company. It announced on Friday that its stockholders voted to approve the proposed business combination with Codere Online. Subject to certain closing conditions, the proposed business arrangement should close by November 30. Following the completion of the agreement, the ordinary shares and warrants issued by Codere Online Luxembourg SA (“Holdco”) will be listed on the Nasdaq Capital Market using the symbols “CDRO” and “CDROW.”
Codere SA is the former holding company for the operator. It will hold a general shareholders meeting in December and approve a liquidation procedure. Then it will request that trading cease in its shares as it is split off.