30/12/2014 – Cinco Días
Martinsa Fadesa intends to present an agreement proposal to the bankruptcy court judge in La Coruna on Tuesday, thus preventing the opening of liquidation proceedings for the company. Representatives of the real estate and major creditor banks have been meeting today in Madrid at least until 5:30 pm negotiating the contents of the proposal.
According to sources close to the company, the financial institutions’ Boards of Directors will have to be the ones to assess and approve the agreement proposal. Martinsa Fadesa must submit an agreement proposal to the judge by December 31st in order to avoid liquidation after failing for a second consecutive year to comply with certain repayment terms. While it is true that this would put brakes on a potential liquidation, the groups still needs to convince at least half of the creditors adhere to this proposal.
The company has proposed to the creditor banks to transfer 70% of its capital. Financial sources say the proposal which Martinsa will present on Tuesday before a judge is not acceptable, and insist on appointing a manager to lead the company. Sources close to the company say that the major creditor banks themselves have approved the agreement in principle, “but it will have to be the banks’ Boards that give the final approval.”
Martinsa Fadesa was declared insolvent in mid-2008 with a debt of around 7 billion euros. In 2011, it reached an agreement with its creditors, leaving its insolvency behind. Of Martinsa Fadesa’s total insolvency debt of 6.6025 billion, 1.4578 billion correspond to its number-one creditor SAREB, followed by CaixaBank (907.9 million); and Popular (574.2 million).
Original article: Cinco Días (by Alberto Ortín Ramón)
Translation: Aura REE