Codere records 10X losses seeking vital lifeline 

Embattled Codere SA has published its Q1 2020 trading statement, declaring group-wide losses of €97m as the company continues to seek vital funding for its operating units.

The figure represents a 10X increase on its corresponding Q1 2019 losses of €8.6m, as Codere’s European and South American gambling venues have ceased trading due to the COVID-19 global pandemic. 

The Bolsa Madrid gambling group’s performance has been further dragged by severe South American currency fluctuations against $ and € trading.

Reporting double-digit declines across all core operating markets, Codere saw its group operating revenue decline 21% to €278m (Q12019: €354m).

Despite reducing operating expenses by €42m, the firm stated that its group costs savings could not offset unit-wide declines, as it recorded an adjusted period EBITDA of €40m (Q12019: €77m). 

The trading statement saw Codere update investors on its ‘cash position’ which will stand at €83m by the end of May trading, should the gambling group proceed to repay its deferred monthly bond coupon repayments.

Maintaining its business units on an extended €130m credit facility, the operator said that its corporate debt has risen to €976 million with the company holding debt-net equivalents of €826m.

This May, Spanish news sources reported that Codere had failed to extend terms of its debt repayment programme with US bondholders Silver Point and Abrams Capital. 

Shareholder eyes have turned to Chairman Norman Sorensen to learn how the company can raise vital capital and whether Codere will proceed to sell-off of company units to keep the business afloat during the next quarter.

In its trading statement, the firm noted: “Together with these efforts to preserve liquidity, we have also launched a formal process with financial advisors, to raise an incremental €105 mm senior debt in order to provide the company with sufficient flexibility to bridge to the restart of our operations and to achieve a revenue run rate that allows us to start generating cash with sufficient room to face potential additional uncertainties in the next months.”