The Spanish gaming firm, Codere, declared on Monday, September 20th, that it anticipates its debt reorganization strategy to conclude on November 5th. This announcement follows a difficult phase for the business, which witnessed a sharp decline in its share value earlier this year due to shutdowns resulting from the COVID-19 outbreak.
Codere’s proposal, which entails transferring authority to lenders to avert insolvency, was initially presented in April. This action will effectively dismantle the present parent corporation, Codere SA Group, and lead to the establishment of a fresh holding company. Lenders will possess a controlling 95% interest in this new organization, leaving current investors with the remaining 5%.
The reorganization strategy relies on a debt-for-equity exchange, with bondholders acquiring notes in return for their current assets. These bondholders have until October 18th to consent to the conditions. The transaction affects securities amounting to €11.5 billion (equivalent to $13 billion USD).
Codere has stressed the significance of this agreement for the company’s viability, enabling it to sustain operations until all of its locations can resume business. Shareholders previously endorsed the restructuring in May.
Under the terms of the arrangement, Codere will obtain a much-needed capital infusion of €225 million. This encompasses an immediate disbursement of €30 million, succeeded by €70 million by the conclusion of May. The residual €125 million will be furnished as the restructuring approaches finalization.
This recent progression indicates that Codere’s restructuring is advancing as planned, presenting a potential route to recuperation for the struggling gaming behemoth.
The people at Cordillera were truly depending on this agreement finalizing quickly in the fourth quarter. They even announced it openly!