Legal Services

AO Shearman advised Codere Group, a prominent casino and online gaming business, on a significant multi-jurisdictional recapitalization that was successfully completed on October 15, 2024. The primary challenge faced by Codere was the restructuring of its EUR1.4 billion secured debt, which required innovative legal strategies to gain the necessary support from creditors. The recapitalization was notable for being the first successful application of the syndicate majority exemption in a Spanish restructuring plan, allowing Codere to proceed with a 50.1% majority vote among its creditors. The tailored solution involved a complex restructuring plan that utilized both Spanish and Luxembourg legal frameworks. This included the transfer of ownership of the operating group to a new Luxembourg-registered holding company, which was wholly owned by the Groups super senior noteholders. The restructuring also featured a debt-for-equity swap for the in-the-money noteholders and the release of the out of the money secured debt. Coderes innovative argument that all secured creditors should be deemed to have voted in favor of the plan if approved by a simple majority of the in-the-money creditors was pivotal in achieving the necessary consensus, ultimately securing over 99% support from super senior creditors. As a result of this recapitalization, Codere significantly reduced its net debt from approximately EUR1.4 billion to EUR190 million, effectively resolving its capital structure issues. This successful implementation not only set a new precedent in the Spanish restructuring landscape but also showcased AO Shearmans expertise in navigating complex cross-border restructuring processes. The transaction included the issuance of around EUR128 million in new first priority notes, fully subscribed by the holders of super senior notes, and out-of-the-money warrants issued as a consent fee to junior secured noteholders.