More than one and a half years of negotiations have not been enough to save Reyal Urbis from a new creditor´s meeting in the sector. The real estate company controlled by Rafael Santamaría will present in the next few days at the Mercantile Register Office in Madrid the second biggest creditor´s meeting in Spain, with a debit side of 4000 million Euros.
Reyal Urbis has decided against exhausting the four months granted in October after the negotiations with the creditor bank reached a dead end in the third refinancing process he company has suffered since 2008.
The financial debt of Reyal Urbis reaches, according to the last accounts presented on the 30th September 2012, 3613 million Euros, plus nearly 400 million Euros it owes the IRS. The bad bank stands out among the creditors (470 million Euros from Bankia and 190 million from NCG), as well as the Santander group and the fund Appaloosa, who bought the debt from Barclays, which reaches 435 million Euros. Most of the banks have already provisioned the debt.
The National Share Market Commission has suspended the trade of the real estate company after the creditor´s meeting was announced. It dropped by 21% on Monday, finally closing at 0,12 Euros per share.
(…) Rafael Santamaría and his team will continue managing the company. Santamaría assures it has presented the creditor´s meeting to guarantee the continuity of the group, with a workforce of 420 employees.
In spite of the optimism of its top executive, its creditors do not see the company´s viability guaranteed and some of them anticipate an organized liquidation of the group. Reyal Urbis, who has not started any project in the last three years, accumulates losses for more than 2000 million Euros in 2008. These figures would make a new liquidity injection necessary, as the company accumulates a negative equity of 993 million Euros.
This asset imbalance makes it very difficult for its shareholders to recover their investment, as anything obtained during the bankruptcy process will be destined to pay the creditors first. The devaluation of the real estate assets in the market reduces the value of the portfolio of Reyal Urbis to levels below its own debt, 3260 million Euros opposite to 4000 million Euros.
Once the creditor´s meeting has been formally presented, the administrators will look for a viability proposal. Otherwise, Reyal Urbis will have to face its liquidation.