Codere Restates 2012 Results to Show Bigger Loss After Error

Codere SA, the Madrid-based gaming company that has lost more than half its value since February, restated its 2012 earnings to show a 28 percent wider net loss after detecting accounting errors.

Last year’s net loss was 134 million euros ($175 million) instead of the 104.7 million-euro loss reported Feb. 28, Codere said in a regulatory filing yesterday.

One of the errors related to the 2007 acquisition of a 49 percent stake in Mexico’s ICELA and was detected following an enquiry from Spain’s market regulator, the company said. Last year, Codere sold bonds to help finance the purchase of 36 percent more of ICELA, owner of Mexican racetrack Hipodromo de Las Americas, bringing its stake to 85 percent.

Investors have dumped Codere’s stock over the past three weeks after its losses increased in first quarter and the El Confidencial website reported the company was considering defaulting on a credit line which comes due this month. Moody’s Investors Service, which last month cut Codere’s credit rating to Caa3, nine steps below investment grade, said the company will probably have to restructure debt because its capital structure is “unsustainable.”

Italo Durazzo, a Codere spokesman, said last month the company had never indicated that it was considering defaulting.

Codere shares fell as much as 15 percent in Madrid and traded 4.9 percent lower at 1.76 euros at 9:59 a.m.

The change in the 2012 earnings doesn’t affect Codere’s cash position, the company said yesterday. Codere had 103 million euros of cash on its balance sheet at the end of the first quarter, up from 85 million euros three months earlier, according to data compiled by Bloomberg.

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