• Transaction / Assets
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Hotel Las Palomas Sold To Palia Hotels For €13.1M

18 April 2016 – Diario Sur

On Thursday, the iconic Las Palomas Hotel in Torremolinos was awarded in an auction to Palia Hotels, a Mallorcan chain that already runs another property on the Costa del Sol, the former Roc de Benalmádena Costa (now called Hotel Palia La Roca). The Balearic group has committed to pay €13,100,000 for the property and its main facilities with the aim of renovating them and reopening the hotel. The auction was conducted in person in the presence of a notary and was “very exciting”, according to the lawyer Ana Alonso, the bankruptcy administrator of the company that used to operate Las Palomas. “Four candidates were involved and the two highest offers were selected to participate in the final phase, and the bids then gradually increased”, she explained. It was such a close bid that the losing company, also Mallorcan based, offered €13,050,000.

Palia will now have to wait for a month for the acquisition deeds to be signed. If any problems arise with the buyer during that period, then the company that offered the second highest bid would have the opportunity to purchase the property. For Alonso, the result is definitely “good news”, given that the money obtained from the auction will be used to pay off the debts with the Tax Authorities, Social Security, the Town Hall of Torremolinos (which will receive €3.5 million for the IBI that the hotel owed and the profit from the sale) and the employees.

Yesterday, (the trade union) Comisiones Obreras expressed its satisfaction because “the almost 100 staff will receive their salaries and compensation payments” after four years of waiting. The total liabilities of the bankrupt company amount to around €15 million. Alonso said that every effort will be made to ensure that the ordinary creditors will also be repaid. However, the senior creditors will have to accept a discount of some kind for that to happen. “We were locked inside the hotel around the clock between June 2012 and June 2015. Our only aim was to keep our jobs and prevent the terrible management of the Puche family from dragging the workers and the hotel into ruin”, said José Quintana, member of the company’s Board.

The buyer will have to invest between €3 million and €6 million on the renovation work before it reopens the hotel, according to Ana Alonso. The four-star Las Palomas Hotel filed for bankruptcy in 2011 and for liquidation in April 2013.

Original story: Diario Sur (by Nuria Triguero)

Translation: Carmel Drake