Codere Buys Time as Debt Mounts

Creditors have allowed Spanish gaming giant Codere to miss a loan payment as negotiations continue to fix the company’s finances and pay down more than €1 billion of debt. A key to the discussions is how much control the founding family will lose in the process.

Codere Buys Time as Debt Mounts

GSO Capital Partners, a unit of private equity giant Blackstone Group, and Canyon Capital Partners are allowing Spain’s Codere to miss a loan payment deadline as talks continue on restructuring the company’s €1.1 billion of debt.

Codere has 30 days to repay €127.1 million of loans, the Madrid-based gaming operator says, and is looking to reach an agreement with creditors that will extend the payment to April 15.

Codere missed a €31 million coupon payment on its 8.25 percent bonds on December 15, triggering a 30-day grace period to pay the interest. Under the extension agreement, the loan will pay an additional 1 percent on existing interest. The loan paid the greater of 7 percent over benchmark rates or 8 percent per annum.

Codere has reported losses for seven straight quarters as earnings have been hurt by recessions and higher taxes in its European markets and stricter gambling regulations and smoking bans in Latin America. The company sought preliminary creditor protection January 2, giving it as much as four months to reach an agreement with lenders as the founding Martinez Sampedro family fights to retain as much control as possible.

Negotiations with creditors include plans to reduce debt by as much as 50 percent. The two sides have yet to agree on how much equity will be transferred to creditors and how much the Martinez Sampedro family will retain.

“Conversations with bondholders are continuing and are productive,” Codere said in a statement. “There is a constructive attitude which we appreciate. Codere wants to reach an agreement.”

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