Colonial bleeds to death. The Spanish real estate company, instead of recovering from its frail economic situation, has registered 308 million Euros in the red in the first half of the year. This means an increase of 73% in reference to the same period of 2012.
Asentia, its bad bank, is the main burden for this company specialized in prime assets. For this reason, the main target for Colonial is to get rid of this company, still on sale. Without taking into account the effect of the housing and land business of Asentia, the results of Colonial would reach a benefit of 87 million Euros, 9% less.
The real estate company is also considering all kind of alternatives to overcome its precarious situation and to reduce the debt of the mother company in around 600 or 700 million Euros, a debt which reaches more than 2000 million Euros.
The debt of the company reaches 75%, as declared by its managing director Pere Viñolas, at the last shareholders meeting. The sale of assets or the extension of capital are its two main chances. Although the company presided over by Juan José Brugera has not taken a decision yet.
The company is also considering the sale of the jewel of the crown: its French subsidiary, Société Foncière Lyonnaise (SFL). As well as in Spain, the office market is starting to feel the effects of the weakening of the French economy although the prime assets are still holding on. SFL also contributed with up to 12 million Euros to the accounts of Colonial, 24% more compared to the same semester in 2012.
As for the office market in Barcelona and Madrid, the company points out in its results that the prices are reaching “historically low levels”.