Codere Shares Fall 12% After Liquidation With Creditors

Spanish operator of online sports and casino betting Codere received its shares will fall by 15% to € 1.08, after reaching an agreement with its creditors that the firm will be liquidated.

As a result of the liquidation, Codere's assets will be relocated to a new corporate structure to accommodate the company's volatility, supported by shareholders with a cash injection of 225 million.

The firm's creditors have also agreed to capitalize more than € 350 million in debt consistent with existing preemptive bonds.

In January, creditors agreed to allow Gambling Group Bolsa Madrid so that defer payments on debt repayment from 2021 to 2023 as part of the organization of restructuring

Under the terms of the latest agreement, these maturities will again be extended for another three years, moving entirely to September 2026 and November 2027.

“This represents a significant reduction in current debt levels, with the operating group's commitments amounting to around € 700 million, which is about three times the expected EBITDA after overcoming the pandemic, and the debt level is considered acceptable,” Kodere said.

As for the € 225 million contribution, the first case will show the € 100 super senior bonds issued by the end of May, starting with an immediate injection of € 30 million, followed by the remaining € 70 million.

The second round of financing, fully € 125 million, will be provided pending completion of the planned restructuring process. Upon completion of this process, a new company will be created to consolidate operations and request the liquidation of the current Codere SA entity.

Codere's lenders will control the 95% capital, while the current shareholders will retain ownership of the remaining 5%, and will also receive warrants allowing up to 15% valuation agreements worth more than € 220 million in the event of a potential future sale within ten years.

Despite the announcement that the decision on liquidation belongs to the majority shareholder, support ”, an extraordinary general meeting of shareholders was planned to agree on the implementation of the restructuring processes.

The firm continued, "With this restructuring, expected to be completed early in the fourth quarter, Codere hopes to secure the future of the company through the bondholders' confidence in the group's prospects, its management team and the majority of the 10,000 employees that make up the organization."

Trade Codere's Q3 2020 report revealed corporate losses of up to € for the year to date of 240 million, while the group's revenues fell by more than 70% to € 460 million, in contrast to € 1.045 billion in revenues recorded in 2019.