25 September 2017 – El Confidencial
A new large real estate operation is on the horizon. The process to sell Habitat Inmobiliaria has entered the home stretch, after the Catalan company selected a shortlist of three candidates to submit their bids.
The three finalists are the international funds Apollo, Bain and Oaktree, whose binding offers are expected to be received by the beginning of October, according to several sources familiar with the operation. The bids are expected to amount to between €200 million – €250 million and the intention is to announce the winner before the end of the year.
Habitat is the heir of the former Ferrovial Inmobiliaria, the subsidiary that the Del Pino family’s group sold to the Catalan property developer, controlled at the time by Bruno Figueras, for €2,200 million at the end of 2006. That deal was signed just before the outbreak of the crisis and it converted the Catalan company into the fifth largest property developer in the country. Nevertheless, that glory was short-lived.
Just two years after that Pharaonic purchase, Habitat filed for the fourth largest creditor bankruptcy in history, by declaring itself in ‘suspension of payments’ with debt amounting to €2,800 million, exceeded only by Abengoa, Martinsa-Fadesa and Reyal-Urbis.
From there, it began a titanic fight to survive, which included a preliminary agreement in the spring of 2010, which saw it emerge from bankruptcy and then, a modification to that agreement, five years later, which gave control of the company to its creditor funds.
In 2015, firms such as Capstone, Goldman Sachs, Bank of America, Värde and Marathon acquired 70% of the company’s capital, by converting the bulk of its debt into shares, and they ordered a return to house construction, to take advantage of the recovery in the sector.
Moreover, those firms continued as the group’s main financiers, with a participation loan of €70 million and another senior loan of €80 million, they took over the management, and they gradually sidelined Bruno Figueras; he currently holds the role of Vice-President.
At the time, the company analysed the option of organising a sales process, but that never ended up happening. The same idea was revived during the first half of this year when Habitat engaged Irea to organise a sale, merger or the entry of a new shareholder into the company.
After almost 11 years (since the purchase of Ferrovial Inmobiliaria), the Catalan property developer is barely a shadow of its former self, but it still holds a juicy portfolio of buildable land – currently, the most sought-after asset by international funds – concentrated in Madrid, Cataluña, Andalucía and Valencia, plus the company also has a presence in Aragón, Portugal and Hungary.
The three finalists in the bid for Habitat have competed in the past for some of the most important real estate operations of recent times, such as the purchase of Vía Célere by Värde, which Bain analysed, and the acquisition of the €30,000 million in real estate assets from Santander-Popular by Blackstone, which Apollo bid for.
Whoever ends up taking control of Habitat will have the perfect platform to create its own group and to start to compete with other investment giants who have already trodden this path, such as Lone Star, the owner of Neinor Homes; Castlelake, owner of Aedas; and Värde, the primary shareholder of Vía Célere and Aelca.
Original story: El Confidencial (by Ruth Ugalde)
Translation: Carmel Drake