The reorganization of Madrid-based gaming operator Codere has been finalized, with the company now under the control of a new entity owned by its lenders.
A debt-for-equity exchange agreement reached in April transferred the business to Codere New Topco SA, a holding company where bondholders have a 95% interest. The previous owners kept a 5% interest, but they can choose to receive up to 15% of the proceeds from any future sale of the company.
The shift in ownership will also see €225 million invested in the business, with €100 million already in place. This is to keep the company operating as it recovers from the impact of the coronavirus (Covid-19) on its operations in Spain, Italy, and Latin America.
Moreover, through the restructuring, €350 million in debt related to existing senior bonds has been converted into equity.
Lenders began talks in March after the company reported a 57.1% year-on-year drop in revenue due to disruptions caused by Covid-19, as well as years of financial challenges. Investors approved the restructuring in May.
The business is expected to be taken over by the new owners by November 5, with the process being cancelled if it is not completed by November 30.
Nevertheless, the firm declared last week that it wouldn’t shut down until today (November 19) after it disclosed its outcomes for the three months concluding September 30.
Despite a 63.1% annual rise in third-quarter earnings to €233.3 million, driven by the rebound of its land-based operations in Argentina and Panama following the easing of COVID-related constraints, the operator stated it anticipates its full-year performance to bounce back to 80% of its 2019 turnover.
Codere’s online division contributed €19.1 million in the third quarter, and the division will be separated from the main business and listed on the Nasdaq Stock Market through a merger with special purpose acquisition company DD3 Acquisition Corp.
Codere SA, the operator’s previous parent company, will hold a shareholder meeting in December to approve the liquidation process, after which it will request the suspension of its stock trading as it is being dismantled.
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