Spanish Gaming Group – Codere, has issued a corporate statement declaring that the group would not make its debt interest payment due on Jan. 15 2015 on a several bond issues.
Codere added that it was continuing debt restructuring negotiations with creditors to help the company maintain operations. According to news source Bloomberg, Codere have been granted an extended loan deadline in which to pay interests and creditors.
Several business news sources have stated that the Codere Gaming is currently burdened with more than €1.70bn of debt, amassed through corporate loans and three corporate bond issues. Reports have stated that the company has been given a four month extension in which to find new investment channels in order to pay off debts or in which to restructure their debt with lenders
Coderes troubles began when the Spanish gaming operator tried to expand in Latin and South American markets. The operator blamed its cash shortage on aggressive expansion plans in Mexico and Argentina, which saw expensive projects fail and close. The company was further effected by new tax laws on land based gaming which effected revenues in South America
Codere operate, racing tracks, gaming halls, casino and digital gaming channels, targeting Spanish speaking regions. The operator was granted a Spanish i-gaming license, promoting betting and igaming products in the Spanish market. Codere launched digital betting products using GTech gaming platforms in 2012, which failed to make an impact on the Spanish igaming market.
The loss-making company has made several late payments on bond coupons in recent months as it tried to win time to restructure its debts. It warned on Thursday that it may be unable to repay a 127 million euro loan due on Jan. 5 if it does not first reach an agreement with lenders. Business news source Reuters reports that International private equity firm Blackstone Group LP , through its credit arm GSO Capital Partners, and hedge fund Canyon Capital LLC are among investors that have bought up Codere debt in recent months.