Transaction / Assets Seller Buyer € MM
The Polanco Family Sells Ritz-Carlton Tenerife To HI Partners
21 April 2017 – El Confidencial
The Polanco family has resorted to selling the jewel in the crown of its personal wealth, the luxury Ritz-Carlton Abama resort in Tenerife, to obtain some financial breathing space in order to try and balance out its complicated economic situation.
According to real estate sources, the former majority shareholder of Grupo Prisa has reached an agreement with the hotel group HI Partners (HIP) to sell 49.99% of the listed establishment for almost €50 million, a quantity to which another €25 million of investment will have to be added to expand the hotel’s facilities with its residential complex. Sources at Timón, the holding company of the editorial giant, have acknowledged the transfer, but have not revealed details of any amounts or commitments.
As El Confidencial revealed several weeks ago, the problems of Prisa, whose shares are trading at their lowest value for a year and a half, have been transferred to the Polanco family, who has requested help from its creditor banks in light of the difficulties it is facing to meet its loan obligations. Its request has been answered by Santander and CaixaBank, its two primary lenders.
To this SOS, a new loan amounting to €60 million has just been agreed, which forms part of the sales operation to HIP. According to sources familiar with the deal, Sabadell, the owner of HIP, has granted this 18-month loan, with the aim of enabling the Polanco family to put its accounts in order.
Once that period has elapsed, and provided the loan has been repaid or transferred to another entity, HIP will acquire 49.99% of the luxury resort, an operation that, between the sales value and the money to be allocated to new investments, would mean that Prisa’s shareholders will obtain another €75 million.
In the event that the Polanco family breaches that obligation during the 18 month period, the hotel chain will not become a shareholder of Ritz-Carlton Abama and the financial problems of the giant will get worse, given that Sabadell would increase its list of creditors to include the aforementioned €60 million. (…).
With losses of €7.5 million at the end of 2015, the most recent period for which figures are available, and sales of €55.25 million, this luxury tourist resort comprises the five-star Ritz-Carlton Abama hotel, a residential development where 148 villas are planned and Abama Golf, a 72-hole golf course. (…).
HI Partners owns 31 establishments and manages €850 million of hotel debt on behalf of Banco Sabadell. Moreover, a year ago, the firm signed an alliance with the giant Starwood Capital Group, to create a joint venture aimed at investing €500 million over the next three years.
Original story: El Confidencial (by Ruth Ugalde)
Translation: Carmel Drake