Codere Said to Plan 45% to 50% Debt Cut as Part of Restructuring

Codere SA and its creditors are said to be planning to reduce the Spanish gaming company’s debt by as much as 50 percent as part of its 1.1 billion-euro ($1.5 billion) restructuring.

The two sides have yet to agree on how much equity will be transferred to creditors and how much the company’s founding Martinez Sampedro family will retain, according to two people familiar with the talks, who asked not to be identified because they are private.

Italo Durazzo, a spokesman for Codere in Madrid, declined to comment on the negotiations.

Madrid-based Codere, which reported losses for seven straight quarters, has to repay lenders including GSO Capital Partners LP and Canyon Capital Partners LLC more than 130 million euros of loans on Jan. 5.

Codere may seek preliminary creditor protection if it doesn’t reach a deal soon, the people said. The “preconcurso de acreedores” process would give the company a maximum of four months to reach an agreement.

Madrid-based Codere’s 660 million euros of 8.25 percent notes were little changed at 56 cents on the euro while its $300 million of 9.25 percent bonds remained at 55 cents on the dollar, according to data compiled by Bloomberg.

“The market is expecting the debt to be cut by about half,” Jorge Abad, a fixed-income investor at Renta 4 Gestora SGIIC SA in Madrid, said in a phone interview. “Codere’s bonds are showing that.”

Codere said in November it had 95.4 million euros of cash. It missed a 31 million-euro coupon payment on its 8.25 percent notes that was due on Dec. 15, triggering a 30-day grace period to pay the interest.

The Martinez Sampedro family is fighting to retain as much control as possible of the company. Codere’s earnings have been hurt by recessions as well as higher taxes in its European markets and stricter gaming regulations and smoking bans in Latin America.

To contact the reporters on this story: Julie Miecamp in London at jmiecamp@bloomberg.net; Katie Linsell in Madrid at klinsell@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net

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