Spanish gaming group Codere last week announced it will be entering liquidation as it gives control to creditors.
The company suffered a 57.2% drop in revenue last month due to Covid-19 closures and had already reached a financing agreement last year.
The agreement involved the restricting of Codere’s finances, as it transfers its assets to a new corporate structure to keep its business sustainable.
All business operations were passed to a new holding company, where bondholders will own 95% of shares and existing shareholders will own 5%.
The company was set to gain a €225m ($272m) cash injection, with €30m being paid immediately and €70m by the end of May. The remaining €125m will be provided near the end of the restructuring process.
As part of the agreement, creditors also opted to convert the €350m debt into equity, relating to existing senior guaranteed bonds.
In a statement Codere said: “With the implementation of this restructuring, which is expected to be concluded at the beginning of the fourth quarter of the year, Codere hopes to ensure the future of the company, thanks to the trust of its bondholders in the group’s prospects, in its management team and in the most of ten thousand employees that make up the organisation.”
However, with the financial change, the group saw its share price drop by 12% to €1.08 as soon as the announcement was made; now its stock price continues to drop and currently stands at €0.89 at the time of writing.