In 2021, Grupo Codere initiated a reorganization plan as the Spanish gambling group is confronting a potential insolvency scenario.
To address the “probable insolvency situation,” Grupo Codere has secured further financial assistance by gaining investor approval for an updated reorganization and refinancing plan that involves raising an additional €100 million in capital. As a result, joint CEOs Alberto González del Solar and Alejandro Rodino have been removed from their positions.
Despite the impact of the Covid-19 pandemic, the company claims to have achieved its initial recovery program objectives, with strong improvements in Argentina, Italy, and Spain.
Grupo Codere is currently facing liquidity challenges due to increased cash repatriation costs as a result of government controls in Argentina and heightened competition in Mexico and Panama. Inflation has further added to its troubles by raising operating expenses.
To address the liquidity concerns, the company plans to raise additional capital through the issuance of First Priority Notes. It has also announced an operational review and capital structure adjustments. Despite these challenges, the company believes it can return to pre-pandemic revenue and gross operating profit levels by 2025 through the implementation of these measures.
The board has stated that the group’s viability hinges on the deferral of payments and obtaining new funds, which will be utilized to make the necessary investments to execute the updated Business Plan and fulfill debt interest obligations.