Codere SA will avoid filing for bankruptcy after the embattled Bolsa Madrid gambling group secured a new 12-month €150 million credit line sanctioned by a new US investor.
Spanish business news sources reported that Codere will sign-off on a new debt plan arrangement this week, agreed on by existing US debt-holders for its $300 million and $500 million corporate debt tranches.
Seeking vital capital to fund its business reopening and the repayment of its deferred debt coupons, Codere is reported to have secured a €120-150 million credit line, guaranteed by a US hedge fund.
Codere has yet to disclose the name of its new investor, however, the firm’s likely saviour is reported to be Miami-based Dryden Capital – a hedge fund taking active positions in distressed Spanish enterprises.
Lockdown proceedings have seen Dryden Capital acquire a discounted Spanish market portfolio, securing debt placements in fast food group Telepizza, fashion retailer Tendam and Codere’s main market rival Grupo CIRSA.
Codere will utilise its new credit facility to reopen its Spanish and South American retail units, which have been closed since mid-March.
Publishing its Q1 trading update in May, Codere disclosed that the company held a cash position of €83 million, funding its day-to-day operations during lockdown at a reported cost of €25 million per month.
Further investor concerns related to Codere deferring its €27 million Q1 coupon repayment to October, as the company maintained cash liquidity to finance the firm’s operations.
Prior to its new arrangement, Codere had failed to convince main US debt holders Silver Point and Abrams Capital, to extend credit lines as the firm’s bond values reached an all-time low, valued as high-risk junk bonds by the Moodys credit agency.
The firm’s perilous position had seen observers stipulate whether Codere Chairman Norman Sorensen would sanction a fire sale of international assets to salvage the legacy gambling group.