The Codere Group had access to a “financial oxygen”, with the issue of 72 million euros in bonds with which it will be able to pay the bills it should have paid in March and April, but had to postpone because it did not have enough.
The issue corresponds to the second installment of the so-called “bridge bonds”, which the company launched in agreement with its bondholders in order to be able to face its most imminent payments.
At the end of April, when it announced the agreement with its bondholders to restructure the company’s capital, it issued a first installment of 31 million euros. The second, of 72 million, was pending on several conditions, including the support of a large percentage of its bondholders. This support exceeded 90% among the creditors of the various securities issues that Codere has in the market, as reported to CNMV.
“As a continuation of the issuance of bridge bonds, the company instructed the payment of all outstanding amounts related to interest, within the corresponding grace periods stipulated in the contracts,” explained the company. The sum of these outstanding interest totaled 30 million euros, between the accounts due in March and April.
Codere – advanced plans due to the bad business situation
These and other obligations, coupled with the poor business situation that deteriorated in the first quarter of the year due to restrictions linked to the coronavirus, accelerated Codere‘s plans to obtain new financing.
According to the agreement signed last summer with its creditors, the company had to guarantee a minimum liquidity level of 40 million euros. As of March 31, the value was 58.4 million euros, an amount from which the aforementioned 30 million euros of bond interest had to be subtracted, which would have meant a default for the company.
The gaming company thus fulfills a first step in the complex restructuring process that will transform bondholders into owners of 95% of the group, through the creation of a new holding company that will replace the current holding, Codere SA. This company will no longer be listed on the stock exchange between September and October, when the procedures for its liquidation will begin.
