Acciona Hires Morgan Stanley To Sell Its RE Arm

20 July 2015 – El Confidencial

Acciona has decided to translate its words into action and accelerate the sale of some of its assets to clean up its ailing accounts. And, to that end, the energy, construction and service company has entrusted the sale of its real estate division to Morgan Stanley, the US bank that closed some of the largest property-related transactions during the real estate boom.

The holding company, owned by the Entrecanales family…has appointed Morgan Stanley, which is led by Luis Isasi in Spain, to list or sell its property-related assets, which were valued at €1,042.6 million at the end of 2014, according to Grupo Acciona’s own accounts. Based on appraisals performed by Savills Consultores and the Instituto de Valoraciones, the portfolio would have a price of €712 million, with land being the largest single item.

Nevertheless, other sources close to the group say that the book value of all of the real estate assets – which include several hotels, university halls, office buildings and 900 homes for rent in Madrid – may reach €1,500 million. “They may sell off the portfolio in parts because some of the businesses have nothing to do with each other”, said Morgan Stanley.

Morgan Stanley is going to sound out the market to decide which is the best option – i.e. whether to launch an IPO through a Socimi or to find a buyer that would take on the whole business. The operation will be similar to the one recently closed by Sacyr for its subsidiary Testa, which was acquired by Merlin Properties, for just over €1,800 million. (…).

With this decision, Acciona begins the divestment of its non-strategic businesses, which it announced at the beginning of the year after recording the worst results in its history. The group owned by the Entrecanales family, which recorded losses of €1,972 million in 2013, managed turn things around in 2014 and make a profit of €185 million, thanks to cost saving initiatives, the suspension of investments and the sale to a third party of its international energy business – this improved trend has continued in 2015 to date. (…).

Of the sales that the company announced at the beginning of 2014 – Bestinver, Trasmediterránea, real estate and energy – only the last one has taken place and then only partially. This has prevented the group from reducing its debt, which remains very high and is even growing (€5,300 million net at 31 March 2015).

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake