It was clear, when Codere shareholders took over the gaming company, that changes would be coming. The first wave of changes has arrived, with operations in Argentina being the target.
As soon as shareholders cut a deal with Spain-based Codere’s former leaders last November, it was known that certain assets would be unloaded. Spanish media outlet El País reports that shareholders want to sell the company’s Argentinian arm.
At stake are Codere’s bingo and arcade operations in the country. An insider told the media outlet that a sale of these assets is essentially a requirement in order to “recover the profitability of the company by shedding one of the geographical areas that are weighing the most in the slow recovery of the group’s results.”
Codere Struggles in Argentina
Codere has enjoyed a strong presence in Argentina, having first entered in 1991. It grew to become the largest licensed gaming operator in Buenos Aires, expanding its footprint to include 11,692 bingo stands and 6,6861 gaming machines.
However, things haven’t gone well, in spite of the large presence in the country. Consistently over the past four years, the company has seen its revenue decline in Argentina. This wasn’t all due to poor management at the company. The Argentinian peso has lost significant value against both the US dollar and the euro.
Because of the issues, Codere had already segregated Argentina from the rest of its operations when reporting financial activity.
Argentina’s gaming industry is finding new life, especially in the online segment. This could impact any price Codere’s shareholders put on the sale of the company’s land-based assets.
More Sales Coming
No price target for the sale of the Argentina assets has yet been provided. The ultimate goal of shareholders is to put the company in a position to turn a profit and allow it to reappear on a stock exchange. As an alternative, an outright sale of all assets could be on the table.
At the very minimum, all of the company’s land-based operations in Latin America are likely to change hands. That’s a long list, as the company is in 20 countries in the region. Codere is in Mexico, Puerto Rico, the Dominican Republic and all of Central and South America.
Any deals are for only the land-based operations. As part of the restructuring, shareholders agreed for Codere to divest its online gambling units in Spain and Latin America. That was finalized via a merger with SPAC vehicle DD3 Acquisition Corp.
Codere Online completed its merger with DD3 on December 1 and secured a listing on the NASDAQ exchange in the US. That has proven positive for the company, with analysts recently predicting strong growth for the new company.
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