Codere Wins Creditor Reprieve to Avert Insolvency Process

Codere SA (CDR) gained more time to negotiate a 1.1 billion-euro ($1.5 billion) debt restructuring deal and avoid seeking full creditor protection.

The Spanish gaming company’s lenders and a majority of bondholders agreed to continue talks for 10 days, Madrid-based Codere said in a statement. It had until today to reach an agreement or start insolvency proceedings after seeking preliminary creditor protection on Jan. 2.

“The company expects to continue the productive discussions with all creditors during the standstill period in order to achieve a consensual restructuring of Codere’s debt,” according to the statement. Creditors also agreed not to demand repayment during this period.

The Martinez Sampedro family is fighting to retain as much control as possible in the company they co-founded in 1980. Codere has reported eight consecutive quarters of losses, with earnings hurt by recessions and higher taxes in its European markets, as well as stricter gambling regulations and smoking bans in Latin America.

About 95 percent of companies that enter insolvency proceedings, known as concurso under Spain’s bankruptcy laws, end up in liquidation, according to the Madrid-based Colegio de Registradores, which tracks company registrations.

Rejected Proposals

Bondholders represented by Houlihan Lokey last month rejected Codere’s latest restructuring proposal, which included a 5 1/2-year moratorium on bond interest payments and no equity stake for creditors.

The company had previously turned down a bondholder plan that included canceling 365 million euros of the group’s 1 billion euros of bonds in dollars and euros, and injecting as much as 400 million euros of new money. The proposal would have seen creditors receiving 96.8 percent of the company’s equity.

Canyon Capital Partners LLC is among the holders of Codere’s 127.1 million-euro loan. Blackstone Group LP’s GSO Capital Partners LP reduced its holding to about 20 percent in January.

Codere’s $300 million of 9.25 percent bonds rose 0.4 cent today to 44 cents on the dollar, Bloomberg data show. The notes were trading at 73 cents a year ago.

Siblings Jose Antonio Martinez Sampedro, Luis Javier Martinez Sampedro and Encarnacion Martinez Sampedro own 68.5 percent of Codere, according to regulatory filings.

To contact the reporters on this story: Katie Linsell in Madrid at; Julie Miecamp in London at

To contact the editors responsible for this story: Shelley Smith at Jennifer Joan Lee, Tom Freke

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