Deadline For Martinsa: 26 Feb

15 January 2015 – Cinco Días

The creditors of Martinsa Fadesa have until 26 February to accept the new proposed payment agreement submitted by the company on 30 December. If they decide not to support it, the company will have to file for liquidation.

In a statement on Wednesday, the judge Pablo González-Carreró, from register number one in A Coruña, declared admissible the proposed modifications to the agreement presented by the company led by Fernando Martín. The period for accepting the terms will begin on 12 February and will end on 26 February, although any support committed from yesterday until the start of the general period will also be valid.

In the statement, the magistrate said that the company had breached the agreements reached previously, but that the third provision of the Royal Decree, dated 5 September 2014, entitles the company to request amendments to the agreement. According to the judge, the company is offering its financial creditors “the assignment of deeds relating to the assets that are not required for the continuation of the business’ activity and the conversion of the remainder of the debt into equity loans”. The proposal “is accompanied by a feasibility plan supported by certain rights and real estate assets that the company considers necessary to ensure the continuity of its business activity”.

The new proposal requires the approval of at least 75% of the ordinary creditors. During the last few weeks of 2014, Fernando Martín held negotiations with the main creditor banks to agree the terms of the new proposal, but he did not obtain strong support from those institutions.

Martinsa Fadesa had to submit a proposed agreement to the judge before 31 December to avoid going into liquidation, after failing to meet certain payment conditions for a second year in a row. The fact that it submitted the proposal on time meant the company avoided potential liquidation for the time being, but it now requires at least 75% of the creditors with ordinary loans to agree to the proposal and for it to be approved by the judge.

The real estate company filed for bankruptcy in mid-2008, with a debt of around €7,000 million. In 2011, it reached an agreement with its creditors to overcome the bankruptcy situation it had found itself in. Of Martinsa Fadesa’s total bankruptcy debt of €6,602.5 million, Sareb is the largest creditor with €1,457.8 million, followed by CaixaBank (€907.9 million) and Popular (€574.2 million).

Original story: Cinco Días (by Alberto Ortín Ramón)

Translation: Carmel Drake