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The Owner of Santander’s HQ is Set to Emerge from Bankruptcy

26 January 2018 – Voz Pópuli

There is light at the end of the tunnel in the creditor bankruptcy of Marme Inversiones 2007, the company that owns Banco Santander’s Ciudad Financiera (in Madrid). This week, a key meeting was held to unblock the bankruptcy proceedings, with deliberation over several appeals, something that the courts will come to a decision about over the coming weeks.

The parties potentially interested in this process have started to take positions regarding the possible sale of the Ciudad Financiera, which could happen in the middle of this year. The best-positioned player is the fund AGC Equity Partners, with a proposal that values that bank’s headquarters at between €2.7 billion and €2.8 billion, as this newspaper revealed.

But two competitors have emerged: a consortium formed by Madison Capital, Glenn Maud and GCA; and a proposal from the Iranian-born financier, Robert Tchenguiz, according to financial sources consulted by Vozpópuli.

The offer that most concerns AGC is the one presented by the US funds (Madison and GCA) and the British property magnate Glenn Maud, who was one of the original buyers in 2008. The price that they may put on the table is close to the figure being offered by the Arab fund, around €2.7 billion.

Months of advantage

Nevertheless, AGC is the favourite in the race because it has been negotiating the operation with Santander for several months. Santander is not only the tenant in this case, it also holds a small part of the debt and a right of first refusal. Having said that, the Commercial Court number 9 of Madrid has denied that preferential right until now. Be that as it may, an agreement with Santander would facilitate everything.

Meanwhile, in addition to these two offers, further competition has emerged in the form of Tchenguiz, owner of the company Edgeworth Capital. The Iranian national has been trying to harness his investment in subordinated debt for years. By holding one of the riskiest tranches, he has to make sure that the liquidation plan protects him, otherwise, he will be exposed to discounts. That negative scenario would become a reality with AGC’s liquidation plan.

For this reason, Tchenguiz is offering an insolvency exit plan in which he would become the owner of the Ciudad Financiera by purchasing the stake owned by Glenn Maud.

To complete the picture, we should take into account that beyond the bankruptcy of Marme Inversiones, two other companies in Spain are involved in this insolvency: its two parent companies, Delma and Ramblas. And that those creditors and investors are awaiting trials in the UK and The Netherlands. This complex legal battle is starting to see the light at the end of the tunnel.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake