3/12/2014 – El Confidencial
The game is played between the chairman of BBVA, Francisco Gonzalez, and the head of Grupo SanJose, Jacinto Rey. Last week, the parties met at a contentious meeting of the managing board of DUCH (Desarollo Urbanistico CHamartin). This investee company controlled by the bank and the builder is responsible for developing a project known as ‘Operation Chamartin‘.
Clash between the business partners was caused by Mr Gonzalez’s proposal on a capital hike of €285 million, an investment impossible to perform by Mr Rey who is struggling to beat his own €1.6 billion debt down.
The proposition threatens Jacinto Rey, who holds 27.5% of DUCH through his Desarrollos Urbanisticos Udra, with being debarred from the game. To keep the stake unchanged, the businessman would have to inject €80 million. It is an enormous effort for a company found in the middle of debt refinancing process, after some of its main creditors, like BBVA, Santander, Sabadell or Barclays sold their debt share to vulture fund Värde Partners which is now lurking and watching each of its steps.
On the other hand, BBVA owns a 72.5% stake in DUCH throught its rela estate arm Anida, so the entity would have to contribute with nearly €220 million to maintain the holding. Beyond the amount, the bank ponders opening door to an investor willing to take part in the Operation Chamartin (covered area highlighted in the picture), as well as to buy the share in hands of SanJose.
According to procurement contract, DUCH was obliged to pay €984 million to Renfe and Adif for 1.8 million square meters embraced by the urban development at the beginning of 2014. However, the payment’s deadline was put forward when Madrid’s Supreme Court restricted the total buildability foreseen in the Partial Plan approved by the City Council.
As the project could move on the soonest in few months, Grupo SanJose reckons the capital hike is unnecessary at this point.
However, BBVA is fed up with waiting. Exactly one year ago, the entity decided to revive the large-scale project. First, it assigned David Martinez as its new Chief Executive Director and then Antonio Bejar for the chairman office.
Original article: El Confidencial (by Carlos Hernanz)
Translation: AURA REE