Codere redirects the future at its next shareholders' meeting

Among the proposals of the Board of Directors, there is an increase in the maximum remuneration of the main governing body of the company, which would go from 2 to 20 million; and, the reduction of capital.

On the other hand, the meeting's agenda denotes two conflicting trends regarding board direction. While the Martínez Sampedro brothers ask for the dismissal of the current non-executive president of Codere, Norman Sorensen, as well as two other directors, Matthew Turner and Timothy Lavelle; the Board of Directors, requests their reelection.

The managers shield themselves
The Spanish company seeks to shield its board of directors against eventual lawsuits or compensation, for which they propose to have an annual maximum of 20 million euros, which will be computed as shareholder remuneration.

In this regard, from CODERE they comment: "The company will only provide such coverage in the event that it becomes necessary due to defense expenses or indemnities that are imposed on the directors and the board of directors." And, they clarify that any action by the directors that is detrimental to the interests of the company, is out of coverage.

Sources explain that the decision to opt for this shield has had certain triggering factors:
• Losses in the order of 97 million euros in the first quarter;
• Total closure of gaming venues during April and May due to the COVID-19 crisis;
• Global financial uncertainty;
• Impossibility of renewing in ‘reasonable conditions’ of the D&O (Directors and Officers) for the board of directors (an insurance to cover the possible civil liabilities of the administrators).

Liquidity search
Codere seeks to expand the expiration of approximately 800 million euros dated 2021; and, thus, expand its liquidity by more than 100 million euros. We must emphasize that if this agreement is not achieved, the continuity of Codere would be affected.

Another proposal of the Board of Directors is related to the reduction of the company's share capital, in order to achieve liquidity.

In reference to this action, the company states that "The purpose of the capital reduction is to favor the placement on the market of the shares that could be issued in the framework of the execution of one or more capital increase operations, granting greater flexibility to the board when determining the effective issue price. "

Opposite positions
The Martínez Sampedro brothers, who hold more than 14% of the company's capital, despite having been removed from Codere's management since 2018; have included in the agenda of the Shareholders' Meeting the dismissal of the current non-executive president of Codere, Norman Sorensen, as well as two other directors, Matthew Turner and Timothy Lavelle, who were appointed by the funds that currently manage the company.

This recurring request from the founders of the company is based on the fact that, in their opinion, the duties of loyalty and due diligence have been harmed "continuously and repeatedly throughout the last fiscal year", in addition to not having carried out properly their duties as counselors.

The board of directors instead proposes the reelection of all current members, including Sorensen, Turner and Lavelle.