Spain's Codere fails to seal debt restructuring deal

MADRID Thu Feb 6, 2014 3:22pm EST

MADRID Feb 6 (Reuters) - Spanish gaming group Codere failed to reach an agreement with bondholders over a major debt restructuring on Thursday, increasing pressure on the company as it battles to avoid insolvency.

The bingo hall and casino owner is struggling to keep up with debt payments because of higher tax bills and other costs and is one of many Spanish companies grappling with high debt levels even as the country emerges from recession.

Failure to agree a restructuring deal with at least half its bondholders by Thursday's deadline means it does not comply with conditions to extend the deadline to repay a 127 million euro loan to April 15, Codere said.

"The company continues talks with bondholders with the aim of reaching agreement on the debt restructuring," Codere, which sought protection from creditors in January, said in a separate statement.

Codere, with debts of 1.3 billion euros at end-September, warned in January it would be unable to repay the 127 million euro loan, due on Jan. 5, if it did not first reach an agreement with lenders.

Lenders agreed to extend the loan until Feb. 6 with the possibility of pushing that out to April if the company reached agreement with at least half its bondholders.

On Wednesday, bondholders made a debt-for-equity swap offer to the group, allowing them to take an 82.5 percent stake in the firm's capital in return for a cut in debt.

The loss-making company, which also has businesses in Mexico and Argentina, has made several late payments on bond coupons as it tried to win time to restructure its debts.

International private equity firm Blackstone Group LP , through its credit arm GSO Capital Partners, and hedge fund Canyon Capital LLC are among investors that have bought up Codere debt.

The U.S. firms have given the company extra credit lines to tide it over and help pay coupons. ($1 = 0.7353 euros) (Reporting by Carlos Ruano; Writing by Sonya Dowsett; Editing by Anthony Barker)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.