Gaming firm has been operating at a loss for some time, no longer able to meet debt obligations.
Reuters reported that the Spanish gaming firm Codere Group has been struggling to meet its debt obligations and has filed for protection from creditors. As of last September it had $1.73 billion in debt. It has four months to reach an agreement with creditors and investors.
Codere has been operating at a loss and making late payments on its bond obligations while playing for time. It announced the need for protection after admitting that it wouldn’t be able to meet an upcoming payment on a EUR 127 million loan.
Sources with knowledge of the situation said that bondholders may accept a 50 percent loss in a debt-for-equity arrangement with Codere.
Gaming firm hit hard by taxes, other problems
The multinational company has been operating gaming machines since 1980, as is the only Spanish gaming company to be publicly traded. It is now a large operator in Latin America, with its games appearing in many Argentine poker rooms.
However, the firm has been plagued by falling profits for some time. Company executives have cited recent tax increases in Spain as one problem. While Codere has provided games for online casinos in Italy, critics have argued that it has not invested heavily enough in the growing online casino market.