Codere cuts debt by €1.2bn in recapitalisation agreement  

Spanish operator Codere has said it will undergo a recapitalisation agreement to reduce its corporate debt by €1.2bn to €128m and add €60m in new financing.

A statement by the group said the move to cut debt would enable it to focus on fulfilling its strategic plans for growth and long-term value.  

The company said €20m of the new liquidity would be received in July. 

It said: “[The debt reduction] will allow the group to significantly reduce the cost of interest, thanks to the significant reduction in debt and the advantageous conditions achieved.”  

A recapitalisation is often carried out to restructure a company’s debt and equity mixture and help stabilise its capital structure.

2024 adjusted EBITDA expected to improve

It expects leverage (debt used to leverage returns from investment or developments) to stand at around 0.9x its adjusted EBITDA for 2023.

Codere Group’s online arm’s FY2023 results said adjusted EBITDA losses had been reduced by almost 80% during the year. Q3 2023 adjusted EBITDA came in at €(4m).

At the time Codere CFO Oscar Iglesias said: “We expect 2024 will be the year in which we pivot to profitability, generating positive adjusted EBITDA and cashflow on the back of between €185 and €200 million of net gaming revenue.” 

As part of the transaction Codere will transfer its ownership to creditors and those providing the latest financing. It has been backed by “a significant majority” of Codere’s current bondholders and shareholders.

The company expects the recapitalization to be completed by the end of the third quarter of 2024.  

In May the company reported Q1 revenues of €313.8m, which marked a 14% dip on the previous year.  

At the time it said the group’s cash position remained largely stable at €104m, although that number did represent a slight decrease from €107.5m at the beginning of the quarter.