9 April 2018 – Expansión
The negotiations between Haya Real Estate, the Spanish subsidiary of the US fund Cerberus, and Bankia, regarding the management of the latter’s real estate assets, are on the verge of completion. In fact, the parties have already established the perimeter of the new agreement: Haya is going to manage real estate assets worth between €15 billion and €17 billion, in gross terms, on behalf of Bankia and BMN, according to sources in the know.
After receiving the legal approvals to merge the also public company BMN at the end of December, Bankia decided to break the agreement it had signed with Cerberus regarding its property, as well as the agreement that BMN had signed with Lindorff. To do that, it had to pay a “three-figure” indemnity. Other sources in the sector estimate that the compensation payment will have amounted to around €100 million for each fund.
These indemnities depend on who initiates the termination decision, which in this case was Bankia following its integration of BMN.
Open to third parties
The process to take on the management of the real estate assets linked to the resultant entity was subsequently opened up to third parties.
Cerberus will have paid a higher amount than the forecast estimated by Bankia, which took advantage of the merger with BMN to renegotiate upwards a new contract in light of the good times that the real estate sector in Spain is currently enjoying.
Haya Real Estate (Cerberus) took over the management of Bankia’s assets worth more than €12 billion in 2013. At that time, the fund paid between €40 million and €90 million, a range conditioned by the fulfilment of the planned property sales.
The old contract was due to expire in 2023. Now, Haya is going to be Bankia-BMN’s servicer until 2028, according to the sources. Meanwhile, sources at Bankia indicate that the parties are finalising the negotiations and that the finishing touches to the operation have not been agreed yet.
BMN teamed up with Aktua in 2014. The former real estate arm of Banesto is now controlled by the Norwegian fund Lindorff.
Haya Real Estate has become a major player in the real estate sector in Spain. In recent years, it has teamed up with Sareb, BBVA, Cajamar and Liberbank, amongst other entities.
Cerberus’s platform in Spain managed €40.2 billion in assets at the end of 2017, up by 2% compared to the previous year. Having fought off competition from Lindorff in the bid to become the only company to manage the real estate assets of Bankia and BMN, Haya has cleared the way for its stock market debut. The Spanish subsidiary of Cerberus has engaged Rothschild to prepare its IPO.
Bankia will hold its General Shareholders’ Meeting in Valencia tomorrow. The focus will focus on the ERE (collective dismissal) following the integration of BMN and the rumours of a merger with BBVA.
Original story: Expansión (by R. Sampedro)
Translation: Carmel Drake