Bolsa Madrid observers are monitoring Codere SA movements closely after Spanish business news sources reported that the gambling group is on the ‘precipice of bankruptcy’.
Burning a reported €25 million a month on working capital (excluding debt repayments), Codere has been looking for urgent funds to keep its business units afloat.
Global Coronavirus disruptions have forced Codere to shut down its entire land-based gaming presence across Spain, Italy, Argentina, Uruguay and Mexico.
The embattled gambling group is reported to be operating off a €130 million credit facility, which on current form will be exhausted by the end of July trading.
Entering May, Codere has declared to Spain’s capital markets authority (CNMV) that it had postponed payments on its €500 and $300 million long-term debt tranches.
Hiring Bank of America and Credit Suisse, Codere will look to raise a further €100 million to secure the company enough capital to execute a Q3 return to business for its land-based portfolio.
Nevertheless, Spanish business news source El Confidencial has reported that Codere will be forced to pay a premium interest rate on its deferred debt obligations which will amount to an additional €27 million per month.
Bank of America will lead the firm’s renegotiations with US debt holders Silver Point and Abrams Capital and will urge the private equity groups to extend debt maturity terms by a further two years.
A debt bond restructure has been recognised as Codere’s preferred options. Nevertheless, US investors will have to be convinced of Codere’s future prospects, having financed the company’s €900 million bankruptcy restructuring in 2015.