Jlslot2.Royal Club MOD APK,200jili Philippines

After Fraudulent Accounting, New Credit Lines for Codere

Published on: 10/01/2020

Two new credit lines have been allowed to Codere, following the discovery of fraudulent accounting last year. This will allow the company to improve facilities in Mexico and Uruguay.

Stacks of coins.

Despite major fraudulence in their accounting, Codere has been granted two new credit lines to salvage their business in Latin America. ?PublicDomainPictures/Pixabay

Investigation Reveals Fraud in Codere Mexico, Colombia, and Panama

Codere officials in their Spain headquarters were surely dismayed last fall by the discovery via audit that accounts had been greatly overstated in a number of their Latin America locations.

This discovery then sparked a months-long investigation into the finances of Codere’s Latin American offshoots — no small feat, considering the gaming titan has activities in Argentina, Mexico, Colombia, Panama, Uruguay, and Brazil. Following close scrutiny, it was determined that the company would suffer losses of €16.5 million (18.3 million USD).

Though inconsistencies were determined in Codere’s offices in Mexico, Panama, and Colombia, officials from Codere reported to Spain’s Comisión Nacional del Mercado de Valores (CNMV) that the fault lay with “a small number of people in Mexico,” who intentionally misreported their finances.

Ultimately, Mexico’s Codere offshoots were hit with €14.8 million (about 16.4 million USD) in losses. Codere Colombia was responsible for €1.3 million (1.4 million USD) in damages, and Panama for €400,000 (about 444,480 USD).

New Credit Lines for 2020 Will Go to Mexico and Uruguay

Following this widely-reported faux pas, Codere has now managed to secure the equivalent of 40 million USD in corporate credit lines, according to the company’s filing with Spain’s Comisión Nacional del Mercado de Valores (the National Securities Market Commission).

These lines will be specifically aimed towards boosting Codere’s facilities in Mexico and Uruguay. Between these two countries, Codere operates a total of 91 arcades, 2 racetracks, and 116 betting locations, though the vast majority are in Mexico (85 arcades, 90 betting locations).

A Boon to Already-Existing and Extensive Credit

Though this additional $40 million will surely be of help to the Spain-based company, Codere already has a lush pile of credit and refinanced bonds to keep them comfortable. According to some reports, the company has a revolving credit facility of about $100 million and a refinanced bond worth close to $860 million. Of their $100 million revolving credit facility, Codere has apparently pulled about $44.5 million for various purposes.

A color image of a row of small flags for a number of Latin American countries: Argentina, Brazil, and Uruguay among them.

Codere hopes that by reselling their Uruguay locations and investing in Mexico, they can offset some of the damage done by plummeting finances in Argentina. ?cristiancortez/Pixabay

Codere Uruguay: Investment to Resell

According to spectators, it is quite likely that the amount Codere invests in refurbishing its various Uruguay operations — which include 26 betting locations, 2 racetracks, and six arcades — will actually go towards offloading their Uruguay branches and selling their holdings there, if not in total then at least considerably.

In October, reports showed that Codere was in talks with Sun Dreams, a gaming operator based in Chile, to sell it up to 50% of their Uruguay operations.

According to these reports, the resell of their Uruguay operations is motivated by Codere’s hopes to salvage some financial losses incurred by ongoing financial troubles in Argentina, which has been steadily shaky since August 2019.

Though El Confidencial, a leading newspaper in Spain, reported the possibility of the Codere-Sun Dreams Uruguay deal, both companies have been elusive on the subject, declining to offer official comments.

Why Sell Off Locations in Uruguay and Not Argentina?

While Codere officials have not offered their press-ready reasoning for the prospective sale, analysts believe the sale allows the company to increase liquid assets by off-loading some of their less essential locations while holding onto their locations in Argentina. Though the peso is shaky now and the immediate future of gaming in Argentina is uncertain, analysts agree that Argentina’s market continues to be one of the most lucrative in Latin America, along the lines of countries like Colombia and Mexico.

Additionally, however, existing state regulations on capital in Argentina implemented after the peso crash this past summer would make it more difficult for Codere to sell off their locations in the Latin American country.

As such, this could explain Codere’s move both to sell off its Uruguay locations and to continue to expand in another extremely promising market in Latin America: Mexico.

New Credit Will Allow Continued Moves for Codere into Mexico

Despite the raw deal handed to Codere by the illegal activities of its Mexico operators, the Spain-based company will continue to offer Mexico an olive branch by continuing to grow their offerings in the country.

Most recently, this included the announcement of a partnership between Codere and Zitro, a leading games developer. The new arrangement means that Codere locations in Mexico will now host Zitro’s latest, and extremely popular, video cabinets, Illusion and Allure. Though Codere already had 5,000 Zitro-made machines in their Mexico casinos, the new deal will increase these offerings by 1,000 units.

What’s more, last August saw Codere sign a joint-venture agreement with hospitality superstars Hard Rock International, in the hopes of building a second guitar-shaped hotel in Mexico City, reportedly valued at 1 billion USD. According to reports on the subject, the new hotel-casino could be up to 48 stories tall.

However, as Mexico’s President Obrador has made it patently clear he is opposed to any new casinos in the country during his tenure, it is unclear what this decree will mean for the highly anticipated Codere-Hard Rock resort and casino.

Have you enjoyed this article? Then share it with your friends.
Share on Pinterest
A close-up of a calculator and paper demonstrating lines of expenses.

Latest Industry Articles

Real Madrid stadium at night.
30Dec

Codere Cup Crowns Winners in Mexico

Muhammad Gregory
A red bus passing across the bridge in front of Westminster in London, UK.
22Nov

Playtech and Caliplay Go to Court

Muhammad Gregory