The man in charge of leading gaming operator Codere’s efforts in Latin America, along with a small group of cohorts, decided that it wasn’t necessary to actually report real figures on revenue statements. Codere uncovered the creative accounting late last year and discovered that full-year earnings could be forced to be lowered by as much as $22 million. Partly as a result of the misleading profit statements, Spain-based Codere had to make up the difference and has now worked out a solution. According to a filing by the company with the Spanish Comisión Nacional del Mercado de Valores (the National Securities Market Commission), it has secured about $40 million (€36 million) in corporate credit lines.
The availability of the funds will allow Codere to upgrade its operations in Mexico and Uruguay. The creative accounting debacle revealed that around $16.5 million of the $22 million was losses out of Mexico, and the new credit lines will be used to make improvements to existing facilities in the countries.
In Mexico, that includes 85 arcades and 90 betting locations. In Uruguay, Codere operates six arcades, 26 betting locations and two racetracks. Any improvements to the properties in Uruguay will be designed to make those venues more attractive to buyers, as Codere is currently looking to offload those operations to another company. It was reported in October of last year that the company was considering selling 50% of the in-country operations to Chile-based Sun Dreams.
Codere is already reportedly sitting on a revolving credit facility of about $100 million, of which it has pulled around $44.5 million. It also has a refinanced bond worth over $858.5 million, which will mature next year.
As the company scrambles to recover from the misguided actions of its former Latin American boss, it is confident that it will be able to continue growing throughout the region. A deal is reportedly underway that is expected to lead to a joint venture project between the company and Hard Rock International for a new casino in Mexico, and it is still pushing forward with more operations throughout the entire region. The antics of its former boss are just a slight bump in the road that won’t cause any major long-term grief. It has already tightened the screws on its internal accounting controls and is ready to reach stable ground.
