Codere bondholders call for Argentine break-up 

The break-up of Grupo Codere SA has begun, as debt-holders of the former Bolsa Madrid gambling group are reported to have contacted PE funds and interested parties with a view to selling the firm’s Argentine unit. 

Sources close to bondholders disclosed to El Pais that Codere’s break-up would begin with a planned sell-off of its Argentine bingo and arcade business.

An Argentine divestment is required to “recover the profitability of the company by shedding one of the geographical areas that are weighing the most in the slow recovery of the group’s results.”

Closing 2021, bondholders delisted Codere from the Bolsa Madrid exchange, choosing to proceed with a break-up of the heritage gambling group that had lost 90% of its former value.

Codere’s business is maintained by a new financing arrangement that secured a €225 million cash injection into the embattled business, which is now operated by 95% bondholder controlled ‘Codere New Topco’.  

Sanctioned alongside its 2021 restructure, bondholders had agreed for Codere to divest its Spanish and LatAm online gambling unit via a merger with SPAC vehicle DD3 Acquisition Corp. The divestment saw Codere Online complete its merger with DD3 on 1 December, securing its listing on the US Nasdaq. 

Operating in Argentina since 1991, Codere is recognised as the biggest licenced gambling firm within the province of Buenos Aires, operating a “total of thirteen gambling halls and 6,861 machines, as well as 11,692 bingo stands”.

Despite its leader presence, since 2018 Codere has reported year-on-year declines for its Argentine unit attributed to continued hyperinflation shocks that saw the ARG Peso devalue +100% against $ and € currencies.

Mitigating economic headwinds, Codere had formerly separated Argentine reporting from its group accounts, which saw the unit register losses of $31 million during 2021 as a result of COVID-19 lockdown.

Bondholders have not disclosed any target price for the sale of the Argentine business that will operate in a transformed marketplace, following the City of Buenos Aires approving the launch of its online gambling regime in 2021.

El Pais reports that bondholders will aim to divest all LatAm assets, in a move to refocus Codere’s financial performance and value within its home market of Spain.    

Shrinking the group’s size and operating structure, bondholders aim for the fastest return to trading profitability, with a view to re-list Codere on a European exchange or sell the reformed business to a private equity fund.   


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