Lenders Agree to Refinance SanJose in Exchange For Its Real Estate Business

19/09/2014 – Expansion

Over a year it took for the SanJose groups executives to come to an agreement with lenders and obtain a positive response from Popular, Abanca and BBVA to refinance its debt totaling at €1.8 billion. The banks will prolong the maturity deadlines in exchange for the property management division of the firm. The family office of the Reys, holding a majority of the company, can keep the control over construction activity of SanJose.

The full agreement is pending permission of Bankia, Sareb (the bad bank) and fund Värde which bought some indebtness from Santander and Barclays.

If all goes on duly, at the end of September or at the beginning of October, SanJose will breathe a sigh of relief. On the stock market, its shares sell at 0.83 euros a share, suggesting a total value of €54 million.

With the €280 million debt-for-equity swap, the banks will take control over 70% of Sanjose Inmobiliaria. Still, the matter of stakeholding in the SanJose business group remains to be resolved. Currently, 48% of it rests in hands of Jacinto Rey (pictured), 47% is divided among the founder partners of the group and 5% belongs to Liberbank.

SanJose had to plead to defer the payments several times due to being unable to satisfy them on time. In 2013 and this year, €77 million were due.

The financial troubles of SanJose root down to the listing of Parquesol in 2007. Two years after that, the firm managed to refinance €2.2 billion due in 2015. In 2013, the outstanding amount was reaching €1.35 billion and the company assured the loans were backed by a €1.73 billion worth of real estate.

The builder earned 16% less in the first half of the year (€230 million), with a turnover of €16 million and losses amounting to €34 million.

Real estate arm of the group gained mere €38 million in H1, out of which one third proceeded from rentals.


Original article: Expansión (by S. Arancibia & C. Morán)

Translation: AURA REE