Observers from Bolsa Madrid are tracking Codere SA movements closely following claims from Spanish business news outlets that the gambling group is on the ‘precipice of bankruptcy.’
Burning on working capital a record €25 million a month (excluding debt repayments), Codere has been searching for urgent funds to keep its business units afloat.
Disruptions of global coronavirus have prompted Codere to shut down all of its land-based gaming operation across Spain , Italy, Argentina, Uruguay and Mexico.
It is estimated that the troubled gambling company operates off a €130 million credit facility which will be exhausted by the end of July trading on the current form.
As of May, Codere has announced to the Capital Markets Authority of Spain (CNMV) that it has deferred payments on its long-term debt tranches of €500 and $300 million.
Hiring Bank of America and Credit Suisse, Codere would try to raise an additional € 100 million to obtain enough money for the company to conduct a Q3 return to business for its portfolio on ground.
Nevertheless, Spanish business news outlet El Confidencial announced that Codere would be required to pay a premium interest rate on its deferred debt obligations amounting to an estimated 27 million euros a month.
Bank of America will lead the company’s renegotiations with US debt investors Silver Point and Abrams Capital, and will advise private equity companies to extend the terms of debt maturity by another two years.
A restructure of debt bonds has been recognised as preferred options for Codere. Nonetheless, US creditors would need to be persuaded of Codere’s potential prospects, having sponsored the company’s €900 million restructuring of bankruptcy in 2015.