All operating business will transfer to a new holding firm, in which creditors will have a 95% stake. Existing Codere shareholders will have a 5% stake, but also obtain warrants that give the right to receive up to 15% of any sale of Codere.
The deal requires support from 75% of bondholders to go through, although the company believes that these new agreements “already have majority shareholder support.”
A group representing two thirds of super senior bondholders and half of senior guaranteed bondholders already backed the deal. €225m will be injected into the company, of which €30m will be contributed immediately, with a further €70m expected by the end of May. €350m worth of debt will also be converted into equity, the due date of which has been extended to September 2026 and November 2027.
Codere started negotiations with lenders last month after a significant drop in revenue – 57.2% – sounded alarm bells.
Its debt issues date further back, however, with the business agreeing a €250m financing agreement in July 2020. These notes, though, carried an initial interest rate of 12.75% that could then be lowered to 10.75%.
A statement from Codere said: “With the implementation of this restructuring, which will foreseeably be concluded at the beginning of the fourth quarter of the year, Codere hopes to ensure the future of the company – thanks to the trust of its bondholders in the group’s perspectives, in its management team and in the more than ten thousand employees that make up the organization.”
Source: iGB
