Reyal Urbis to approve swap of real estate for debt

22 May 2015 – Cinco Días

Reyal Urbis strives to overcome bankruptcy and restructuring procedures it has been involved in for two years. The company plans on reaching a unilateral agreement with the Spanish Treasury, to which it owes 400 million

Reyal Urbis will request authorization at its general shareholders’ meeting to carry out a  swap of real estate assets for debt, as set out in its proposed agreement to overcome bankruptcy proceedings, in which the company has been involved over the past two years.

In the proposed arrangement with creditors, presented to the judge last February and still pending for approval, the company is offering real estate assets to its creditor banks in order to settle debts, though only 80% of them. Reyal will ask its board to “approve the transfer of title of key assets for the company in order to formalize payment of debt according to the proposed agreement.”

In addition, the agenda of the annual meeting of the company, controlled and chaired by Rafael Santamaria, scheduled for June 30th, will include “informing shareholders on the bankruptcy procedures the company is going through.”

Four members of the Board are to be re-elected

Reyal Urbis’ Board must also approve the re-election of four members of the board as directors of the company, including the President, according to the agenda submitted to the National Securities Market Commission (CNMV).

While Reyal plans its upcoming annual meeting, it is still waiting for Commercial Court 6 of Madrid to approve the proposal agreement it had submitted in February and to set its corresponding acceptance period.

A smaller Reyal

Under this proposal, Reyal plans to reach a unilateral agreement with the Spanish Treasury, to which it owes about 400 million euros, and carry out a transfer of assets to offset its liabilities of about 2.9 billion to banks.

The assets that are to be swapped will offset 80% of Reyal’s debt to financial entities

However, according to insider sources from the bankruptcy proceedings, the assets of Reyal represent a debt relief of around 80% off the liabilities that the company has with most of the financial institutions. Moreover, the company plans to allocate its asset to the banks at random.

The agreement with creditors and the viability plan designed by the real estate company foresee that, if the proposal is accepted, Reyal Urbis will become a smaller company after coming out of the proceedings. It will be left with a small pool of assets and manageable debt on its balance sheet.

Reyal Urbis had a ‘equity hole’ of almost 3 billion euros at the end of 2014, according to the annual report submitted to CNMV.

Original story: El Mundo

Translation: James Leahu

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