/cloudfront-us-east-1.images.arcpublishing.com/copesa/APV3LMP43VER7MBU7N7TMXH3AM.jpg?fit=%2C&ssl=1 "The future of the Martínez family without Enjoy")
The house does not always win and the Martínez family knows that. They spent a little more than four decades at the head of Enjoy, the most important chain of casinos in the country. They saw how the competition began to get tough under the hand of the casino law of 2005, they gave up their participation with the opening on the 2009 Stock Market and in 2018 they found the North American fund Advent International, their new partner to whom they handed over control of the casino. company.
In the future, it will be others who will move the chips of the firm. This is because Advent, a fund that today has 34.4% of the company according to the 2019 report, and the Martínez family -who through Inversiones e Inmobiliaria Almonacid and Inversiones Cumbres have 26.12% of Enjoy-, in As a whole, they will hold less than 10% participation, thanks to the approval of the judicial reorganization by the creditors last Friday, which together represent 92.7% of the valued loan liabilities and 100% of the secured creditors. The pact will allow the games company to stay alive and carry out a modernization and international growth plan, the same one that years before put financial stress on the company.
Enjoy has lost US $ 17 million in valuation since last April 24, when it requested its judicial reorganization to avoid bankruptcy. At the end of Friday, its equity reached US $ 31 million, far from the US $ 555 million of market appreciation that it reached in April 2013, its best number since its opening. In terms of the bottom line, they have not done very well either: both in 2018 and 2019 they ended up with a profit in the red (see infographic). All this, exacerbated by a debt that reached US $ 465 million.
Enjoy presents its final reorganization plan, with the agreement of the creditors
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Enjoy achieves broad support from creditors due to judicial reorganization plan
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The judicial reorganization process was Enjoy’s “last way out” to face the three crises that unleashed in the last nine months: social, pandemic and economic, Javier Martínez, until now president of Enjoy, listed in a letter he wrote a year ago. couple of weeks – in the middle of the restructuring process – and that he sent to the authority to present the firm’s position in the controversial conflict between the sector and the government over the new casino tender, launched at the end of July. In the letter, the firm stands out from the industry. “Enjoy has had to accept a Judicial Reorganization process as the last measure to face the three crises that have unleashed in the last 9 months, social, pandemic and economic, in the context of a stressed financial situation,” explained the businessman in which could be one of his last public appearances after losing presence in the game company.
“The die is cast, the Martínez family will liquefy and they will be left with about 2.7%. They have already resigned themselves to losing control, it cost, but they already understood it ”, admits a close family member.
In the short term, Javier Martínez, who did not want to talk to this medium when he was consulted, will continue to be linked to Enjoy as a shareholder and director, a position that he will at least continue to occupy until the end of this year, when, it is estimated in the financial market, the new shareholding structure is formalized and there is a replacement on the company’s table. “Throughout 2020 he will continue in his capacity as director. Now, for the long term, it is necessary to see if the new shareholders ratify him in that position and if the figure of the Martínez in Enjoy generates confidence in them. That remains to be seen ”, explains a connoisseur of the internal conversations of the restructuring process.
The exclusive group of managers of big troubled companies
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Foreign casino companies look forward to Enjoy while negotiating with creditors
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New cycle at Enjoy: EuroAmerica and Penta would be the main shareholders
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The youngest son of the Martínez clan, made up of Antonio, Cecilia, Ximena and Javier, has played a very active role in the reorganization of the company, where he has asserted his role as shareholder and director, sources close to the company tell us. He understands that the only option for the economic unit to remain alive is the reconversion of creditors into shareholders.
For those who were involved in the negotiations, they were all difficult times. “There were many tug of war, and many discharges also due to the critical situation that had arisen,” says a source who knows of the conversations between the company and the creditors. It was complex, moreover, because it was a negotiation not only multilateral, but multifactorial, and in context. They all presented different realities. The social and economic crisis made the scenarios different for everyone, so conversations were sometimes very trapped. A source acknowledges that in normal times the negotiations would have been different, because the social outbreak, the pandemic and the global economic crisis generated a lot of uncertainty.
And now, what will the Martinezes do without their strong presence at Enjoy? “Nobody knows that,” says someone close to the family. It is that after closing the organizational chapter they will have a “reflective pause”, indicate the actors consulted. The Martinezes participate in real estate companies alone and with partners, where the Cueto family – Latam shareholders – is also important, but nothing of the size of Enjoy.
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Enjoy files for Chapter 15 of the US Bankruptcy law to recognize the reorganization that it is carrying out in Chile
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The most important thing, they maintain, is the farm that the family has in Rengo, Region VI. This is Agrícola Victoria, where the main shareholder is Inversiones Cumbre, the same company with which the family is present in Enjoy. “It is a very nice farm and where the family has done very well. This year they have exported everything, ”says a businessman in the field.
The company has had it since 1980, when Agrícola Victoria began to become known in the grain brokerage. Currently they have about 400 hectares where in addition to producing corn, towards the 2000s they began to produce wine grapes and various other fruit trees. Today they are empowering it. In fact, in April they hired a new agricultural manager, an engineer who spent four years working at David del Curto. “It is a society that has a lot of value. It is a productive field and it has a good organization. It should be noted that, in this pandemic, agribusiness in general has been favored because food, both in Chile and in the world, has been valued. From the world of agriculture, Agrícola Victoria is big, but compared to the business that Enjoy generates, this is a small business for the family ”, says an agricultural actor who knows her.
The Martinez business spectrum is wide. Commercial information accounts for more than twenty companies, including financial and real estate companies. Through Inmobiliaria Bicentenario they have the building where Enjoy operates today, in Presidente Riesco, among other towers in the area; They also manage real estate projects in Coquimbo. However, sources consulted indicate that all these operations are related to Enjoy.
In the northern city they also own the land that previously belonged to the Club Hípico de Peñuelas, where they are building residential buildings. The best known partnership is the one they have with the Cueto family in Valle Escondido, in Lo Barnechea, where Antonio Martínez Seguí is director. They are united with the Cuetos by a long friendship that goes back to the founders of both clans and with whom they have done business both in Chile and abroad.
They are also with them in Nueva Las Condes, where, in addition to the Cuetos, the Sarquis, Kassis and Zalaquet families participate.
At the same time that the creditors this Friday approved the proposed reorganization agreement, the company’s management concluded its virtual roadshow that lasted for the last two weeks. The goal is to raise capital for $ 50 billion, of which $ 25 billion are secured by commitments or backstops from Penta Vida, EuroAmerica (both companies jointly committed $ 15 billion) and Moneda ($ 10 billion). The remainder is expected to rise from the other existing creditors, such as the insurers Principal, 4Life and Vida Security. The deadline to obtain the committed resources is until this Thursday, August 20.
Regarding asset sales, it is contemplated to move in that direction once the new main shareholders take over, that is, EuroAmerica and Penta. The way for this to happen is as follows: bondholders will have to exchange their bonds for shares, which will take around four months, estimate sources involved in these negotiations. In this period, the reorganization must be approved, the money raised and the convertible bonds issued. The latter would take around 60 days, since a series of procedures have to be done at the CMF. In addition, an issue of shares must be carried out that will support the convertibility of the bonds. These shares will have to go through a pre-emptive right period for current shareholders, who have a commitment to waive their preferred options.
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Enjoy advances in financing formulas and evaluates capitalizing debt
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The slam of the local Enjoy bondholders to Advent’s proposal
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Once all of the above is done, the bondholders will be able to form the company’s new board of directors, which would tentatively occur in December. In the market, they foresee as probable new directors Henry Comber, historic top executive of EuroAmerica; Georges de Bourguignon, partner of Asset Chile, and Fernando Tisné, partner of Moneda.
The insurance companies involved in Enjoy do not plan to be strategic or long-term players in the company, so different market sources assure that in addition to focusing on stabilizing it in the short term, they will put their efforts in selling the firm, which has been being followed by groups of international casino operators. Pulse has already announced that there are stakeholders from Mexico and Spain monitoring this process.
Meanwhile, the company continues to develop the transformation plan outlined in 2019 and which looks towards 2025. They are also preparing to resume operations, a work that has been carried out by Eliseo Gracia Martínez, the only one of the third generation of the family who today it is in Enjoy.
Along with this and in parallel with the restructuring process, the gaming company maintained the proposals and conversations with the Superintendency of Casinos and with the Ministry of Finance, and prepared the protocols and operational plans for the reopening, so that -according to the Rodrigo Larraín himself, Enjoy’s general manager in a recent presentation to investors, would be ready to resume operations as soon as the authority permits.
Everything suggests that Enjoy casinos’ roulettes will continue to spin for several more years, but without the Martínez as protagonists. P
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