Home Finance Codere reduces debt by EUR1.2bn through recapitalisation agreement

Codere reduces debt by EUR1.2bn through recapitalisation agreement

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According to the group, this move will allow it to concentrate on its growth strategy and long-term value.

Codere, a Spanish operator has announced that it is undergoing a recapitalisation to reduce corporate debt from EUR1.2bn down to EUR128m. It will also add EUR60m of new funding.

In a statement, the group stated that the decision to reduce debt will allow it to concentrate on its long-term strategic goals for growth.

According to the company, EUR20m in new liquid assets will be paid out by July.

The statement read: “[The reduction of debt] will enable the group to reduce interest costs significantly, due to the significant reduction achieved in debt.”

Recapitalizations are often performed to help restructure the debt-equity mix of a business and stabilize its capital structure.

Expected improvement in 2024 EBITDA

Leverage (debt to leverage investment returns or development) is expected to be around 0.9x adjusted EBITDA in 2023.

Codere reported that the adjusted EBITDA loss had decreased by nearly 80% in FY2023. The adjusted EBITDA for Q3 of 2023 was EUR(4m).

Oscar Iglesias, CFO of Codere at the time said that they expected 2024 to be the year when we will pivot towards profitability. We expect this on the basis of a net gaming revenue of EUR185-200 million.

Codere’s ownership will be transferred to its creditors as part of this transaction. The transaction has the support of “a substantial majority” among Codere’s existing bondholders.

Recapitalization is expected to be complete by the end third quarter 2024.

The company’s Q1 revenue in May was EUR313.8m. This represents a drop of 14% compared to the year before.

The group said at that time the cash position was largely unchanged at EUR104m. However, this number represents a small decrease from EUR107.5m in the first quarter.

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