It’s been over a month since shareholders took control of Spanish gaming operator Codere and warned that asset sales would be coming. Now, the first group of assets is on the chopping block, with the shareholders possibly looking to sell Codere’s stakes in Argentina. This is part of a plan by the group to assist the struggling firm with reorganization and profitability.
Codere Shareholders Begin Asset Sale
According to Spain’s El País newspaper, Codere shareholders are considering a sale of the company’s Argentinian bingo and arcade businesses. Between the two, there are 6,861 gambling machines in 13 gambling halls and another 11,692 bingo stands. How much the shareholders might ask for the assets hasn’t been reported.
Codere reported an operating loss of $35 million in its Argentinian operations for the first nine months of 2021. This was due to continued macroeconomic instability and local hyperinflation. Despite the strong presence in the country, Codere is losing more money in Argentina than in any other country.
Argentina was Codere’s second most profitable pre-pandemic market, behind Spain. However, the new operator’s leaders have reportedly already contracted with PJT Partners Inc. to gauge interest from a variety of buyers. El País claimed that the slot and bingo parlor businesses in Latin America’s fourth-largest country were “complicated.” Therefore, any sale of such a business would be a way for the larger entity’s profitability to recover.
Online Operations Safe
The possibility of Codere exiting Argentina in the future is reportedly complicated by the belief that the company’s new management team, headed by Vicente Di Loreto, is interested in remaining in South America. In addition, Codere Online company has also just entered the embryonic iGaming marketplace of Buenos Aires.
This subordinate online gaming company is listed on the NASDAQ exchange. It was established in partnership with DD3 Acquisition Corporation, a Mexico-based special purpose acquisition company.
However, Codere Online has been segregated from the land-based operations. This could facilitate a sale of the latter activity. Codere’s new management regime is reportedly interested in selling as much of the land-based operations, including everything in Latin America, in order to bring the company back to profitability.
It isn’t clear if Codere has been in serious negotiations with any entity about the Argentinian assets. As Latin American gaming grows, finding a candidate isn’t likely to be difficult, even if Codere’s decision-makers have to sell the assets piece by piece.